The tariff war initiated by U.S. President Donald Trump has dealt a significant blow to global trade, affecting countries worldwide, including Nigeria. During a recent interview on Channels Television’s The Morning Brief program, Segun Ajayi-Kadir, the Director General of the Manufacturers Association of Nigeria (MAN), highlighted the negative repercussions of Trump’s tariffs on Nigerian exports and the broader implications for trade agreements like the African Growth and Opportunity Act (AGOA).
Initially, the U.S. imposed a 14% tariff on Nigerian products, but it was later reduced to 10% during a temporary pause. Ajayi-Kadir stressed that this ongoing tariff situation presents substantial challenges for Nigerian manufacturers trying to penetrate the U.S. market. The AGOA provides duty-free access to the U.S. market for eligible products from sub-Saharan African countries; however, with AGOA’s expiration set for September 2025, the timing of these tariffs could damage Nigeria’s prospects for increasing exports to the U.S.
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Ajayi-Kadir explained that U.S. trade policies under Trump are designed to prioritize domestic manufacturing and reduce imports, which complicates Nigeria’s efforts to capitalize on its growing manufacturing sector. He noted that while Nigeria is gradually making inroads into various markets, the new tariffs hamper this progress. The impact extends beyond Nigerian manufacturers to the general economy, contributing to an environment of uncertainty and concern.
Consequences of Retaliatory Tariffs
The broader global tariff war, spurred by Trump’s administration, has resulted in retaliatory measures from China and the European Union against American goods, which in turn creates collateral damage for countries like Nigeria. Even if Nigerian exporters are not directly affected by U.S. tariffs, they will likely suffer indirectly from reduced global demand and increased prices for imported goods essential for manufacturing. Ajayi-Kadir emphasized that retaliatory tariffs would lead to higher duties on various products, complicating the trade landscape for Nigerian exporters.
Moreover, he expressed concern about the Nigerian government’s potential retaliatory measures against the U.S., noting that any such actions could further harm Nigeria, particularly because the country imports many capital goods from American markets.
The uncertainty in international trade policies creates an increasingly challenging environment for Nigerian manufacturers seeking to thrive amid shifting global dynamics.
Calls for Strategic Collaboration
To mitigate these challenges, Ajayi-Kadir urged a strategic collaboration between the Nigerian government and private sector stakeholders. He praised the Finance Minister and the Economic Team’s intent to engage in discussions about the nation’s response to the tariffs, indicating the importance of having a coordinated approach. He also emphasized that Nigeria should be proactive in ensuring regulatory frameworks and policies support domestic industries, enhancing resilience against external shocks.
Ajayi-Kadir cautioned against any proposed increases in port fees or customs duties, arguing that such measures would only exacerbate the difficulties faced by manufacturers. He stressed the importance of maintaining a competitive environment for Nigerian businesses to sustain growth and navigate the turbulent trade landscape shaped by Trump’s tariffs.
The Role of AGOA and Broader Trade Strategies
As the AGOA approaches its expiration, Ajayi-Kadir noted that Nigeria must make significant efforts to capitalize on this trade agreement before it potentially expires. He lamented the fact that Nigeria has not made comparable inroads in trade with the U.S. as countries like South Africa and Kenya, placing more pressure on Nigeria to adapt to the current global trade dynamics.
He acknowledged that Nigeria’s trade with other African nations has been improving, citing that Nigerian trade within Africa exceeded trade with any other nation last year. This trend underlines the significance of the African Continental Free Trade Area (AfCFTA) as a crucial initiative for bolstering intra-African trade, which may offer a more stable foundation for Nigeria’s economic growth in the face of external pressures.
Ajayi-Kadir concluded by underscoring the importance of building resilience and fostering a conducive business environment within Nigeria to prepare for any future challenges in global trade, stating, “The world doesn’t just need America; America needs the world.” He expressed optimism that Nigeria can strengthen its role in international trade through enhanced intra-African collaboration and strategic adaptation to evolving market conditions.
The ongoing tariff war initiated by President Trump clearly poses substantial risks to Nigerian trade and its economy at large. With growing concerns about the export landscape and the pressures from evolving global economic policies, Nigeria must be strategic in its responses and committed to fostering an environment where local manufacturers can thrive. By leveraging regional trade agreements like AfCFTA and addressing internal competitiveness, Nigeria has the potential to navigate these complex challenges effectively.
