Business
President Trump’s 14% tariff threatens Nigeria’s $6bn export revenue
…as FG reviews 2024 budget to mitigate effect
After President Donald Trump of the United States won the presidential election, there were concerns across the world about impending seismic shifts in international trade, diplomacy, and international relations. The reason for this heightened fear was hinged on the nature of Trump’s politics and his emphasis on America’s return to isolationism.
He did not waste time to prove his critics right, as he has since taking office rolled out political and economic policies that have ramifications across the globe. Trump, on April 2, 2025—Liberation Day—announced the enforcement of sweeping tariffs on all goods imported into the country, a development that has placed over N323.96bn worth of Nigerian exports at great risk.
Named the “Universal Baseline Tariff,” the policy places a 10 per cent levy on all imported products, with additional reciprocal tariffs for countries considered to maintain unfair trade practices.
Though crude oil and energy-related goods are excluded from the new policy, Nigeria’s rising portfolio of non-oil exports to the U.S. may now face serious challenges.
Already stakeholders and exporters have voiced growing concerns over Nigeria’s potential loss of $6 billion in annual export revenue following the 14-per cent tariff imposed by the U.S. President on Nigerian exports.
They warn that the new policy could signify the end of Nigeria’s preferential trade benefits under the African Growth and Opportunity Act (AGOA), a programme launched in 2000 to enhance market access for African countries.
This comes as the federal government acknowledged the new development and reaffirmed its determination to cushion the impact and fast-track efforts toward economic diversification.
Trade Profile
Data from the National Bureau of Statistics for 2024 reveals that Nigeria garnered approximately N4.49tn from the export of crude oil and energy products to the United States. These items, which include petroleum oils and gases, were the main exports from Nigeria to the American market and have been exempted from the fresh round of tariffs.
However, the country’s non-oil and non-energy exports—worth N323.96bn over the same period—are now subject to the new tariff regime. An analysis of Nigeria’s quarterly trade performance shows how the country’s non-oil exports have grown in volume and variety.
Data shows that in the first quarter of 2024, non-oil, non-energy exports to the U.S. were valued at N74.79bn. These included flours and meals of soya beans worth N28.21bn, urea at N20.33bn, refined lead at N14.40bn, cashew nuts in shell at N11.09bn, and technically specified natural rubber valued at N769m. These products represent major outputs in agriculture, fertiliser manufacturing, and industrial raw materials.
The second quarter posted a significant jump in export volume to N123.23bn, driven largely by heightened demand for urea, which soared to N86.54bn. This was followed by refined lead at N21.88bn, flours and meals of soya beans at N9.44bn, and natural rubber at N4.37bn. The steep rise in urea exports during this period underscores Nigeria’s growing importance in the global fertiliser market, particularly to U.S. agro-businesses.
But in the third quarter, data shows that non-oil exports dropped slightly to N84.38bn. Urea remained the dominant product at N39.20bn, followed by refined lead at N18.94bn. Cocoa beans made their entry into the list of major exports during the quarter, with shipments worth N14.48bn. Soya meals added N6.78bn, while natural rubber rose to N4.99bn. This quarter marked Nigeria’s deeper integration into the global agricultural value chain, with cocoa and soya meal exports catering to U.S. processing industries.
By the fourth quarter, Nigeria witnessed its lowest non-oil, non-energy export figure of the year, with total value falling to N42.55bn. However, superior-quality cocoa beans led the quarter with N29.92bn. In addition, the country exported un-wrought aluminium alloys and cathodes, both valued at over N4bn, alongside technically specified natural rubber at N4.37bn and minor shipments of other food preparations worth N61m.
The decline in total export value, despite the rise in cocoa bean shipments, reflects a narrowing product mix and plummeting volumes across other categories. Altogether, Nigeria’s non-oil, non-energy exports to the U.S. stood at N323.96bn in 2024.
Tariff Impact
These products are now exposed to the newly announced 14 per cent tariff, which could alter their competitiveness in the U.S. market. Urea, which earned N146.06bn in total exports during the year, stands as the single largest item at risk. The fertiliser, produced locally and exported at scale, may now face reduced orders from American buyers seeking cheaper sources elsewhere.
Cocoa beans, with a total export value of N44.40bn in the second half of the year, are equally in danger. The product remains critical in the global confectionery industry, and the U.S. is a major destination for Nigerian cocoa. With the tariffs in place, U.S. importers may be forced to look elsewhere beyond Nigeria to source the product.
Refined lead, which earned Nigeria N55.23bn in exports in 2024, is also at risk, as the U.S. continues to promote domestic mining and refining operations. Flours and meals of soya beans, with N44.43bn in exports, are part of global food and livestock feed supply chains. Tariffs on these products will reduce competitiveness and push buyers to consider alternative markets.
Similarly, natural rubber, with N14.5bn in exports, could lose its market edge to producers in other countries if cost becomes a determining factor under the new policy. Although Nigeria’s crude oil and energy exports—totalling over N4.49tn in 2024—have been excluded from the tariffs, the country’s push for export diversification now faces a serious test.
Tariff Policy
Trump, in his address, noted that the tariffs are a necessary step to bring back American manufacturing and curb the country’s dependence on foreign goods. Though he has placed a 90-day pause on the implementation due to the economic shock experienced last week and threats from countries to impose reciprocal tariffs, the fallout is expected to be global.
Many developing nations like Nigeria now face the challenge of reconfiguring their trade strategies amid rising protectionism from their largest partners. Defending the policy, the United States Trade Representative last week criticized Nigeria’s import ban on 25 categories of goods, claiming that the restrictions limit market access for American exporters.
The USTR highlighted the impact of Nigeria’s import ban on various sectors, particularly agriculture, pharmaceuticals, beverages, and consumer goods. These restrictions affect items such as beef, pork, poultry, fruit juices, medicaments, and alcoholic beverages, which the U.S. views as significant barriers to trade.
“These policies create significant trade barriers that lead to lost revenue for U.S. businesses looking to expand in the Nigerian market,” the agency said via its X handle. In 2016, Nigeria implemented the ban on these 25 items as part of efforts to control imports and stimulate local production. Some of the banned items include poultry, pork, refined vegetable oil, sugar, cocoa products, spaghetti, beer, and certain medicines.
Government Response
The Federal Government last week admitted the adverse effects of the newly imposed tariffs by Trump on Nigeria’s oil and non-oil exports, which could negatively affect trade relations and the competitiveness of Nigerian products in the U.S. market.
In a statement, Nigeria’s Minister of Industry, Trade, and Investment, Dr. Jumoke Oduwole, acknowledged that the policy would affect the competitiveness of Nigerian goods, especially in sectors reliant on market access and price competitiveness.
According to the minister, Nigeria’s exports to the United States have averaged $5–6bn annually in the last two years. She noted, “A significant portion (over 90 per cent) comprises crude petroleum, mineral fuels, oils, and gas products. The second-largest export category, accounting for approximately 2–3 per cent, includes fertilizers and urea, followed by lead, representing around one per cent of total exports (valued at approx $82m).”
“Nigeria also exports smaller quantities of agricultural products, such as live plants, flour, and nuts, which account for less than two per cent of our total exports to the U.S. While oil has long dominated Nigeria’s exports to the US, non-oil products—many previously exempt under AGOA—now face potential disruption.”
“A new 10 per cent tariff on key categories may impact the competitiveness of Nigerian goods in the U.S. For businesses in the non-oil sector, these measures present destabilizing challenges to price competitiveness and market access, especially in emerging and value-added sectors vital to our diversification agenda.”
Wale Edun, the Finance Minister and Coordinating Minister of the Economy, noted that, “Nigeria’s exports to the U.S. were N1.8tn, N2.6tn and N5.5tn in 2022–2024, respectively. Fortunately, oil and mineral exports accounted for 92 per cent, implying oil and mineral exports amounted to N5.08tn in value, while non-oil was just N0.44tn. Consequently, the tariff effect on exports is negligible if we sustain our oil and minerals export volume.”
“We are going back to the drawing board to look at our budget all over again because we have to see what changes have been made in the assumptions that underlay the production of that budget and the reality over the first quarter and even projected into the future,” he said.
Commentators say the policy has the potential to raise the prices of goods and services for consumers, weaken the standard of living, slow down manufacturing activities, hinder international trade, and consequently weaken demand for Nigerian oil in the U.S., one of its key markets.
Trade Surplus
According to the National Bureau of Statistics, Nigeria’s trade with the United States reached a combined N31.1tn in 10 years between 2015 and 2024. An analysis of the foreign trade report showed that N16.4tn was recorded as exports and N14.71tn in imports, indicating a trade surplus of N1.64tn.
A breakdown showed that Nigeria exported goods worth N344.27bn in 2015 and received N581.99bn in imports. In 2016, it increased to N1.03tn in exports and N706.09bn in imports. Exports surged to N1.73tn in 2017, N1.094tn in 2018, and N1.01tn in 2019 before dropping to N382.19bn in 2020 due to the pandemic.
By 2021, exports increased to N800.34bn, N1.82tn in 2022, N2.61tn in 2023, and N5.52tn in 2024.
Professor Ajayi Obaro, a political economist, told Business Hallmark that “It’s better for African countries to come up with new initiatives while affirming old ones on how they can deepen trade within the continent. Africa has a large market, so it’s time to look inwards.”
