US 12.5% Tariff: Nigerian Businesses Warn of Export Setback, Demand Urgent Federal Action

Nigerian business leaders have warned that the United States’ decision to impose a 12.5 per cent tariff on certain Nigerian exports could undermine the competitiveness of affected products in the American market, even as they acknowledged that exemptions for key raw materials could limit the broader impact on trade.

The United States announced the new tariff on July 23 as part of a trade measure targeting countries it said had failed to prohibit the importation of goods produced with forced labour.

The measure affects imports from 60 economies, including Nigeria, while countries such as India, Indonesia, Malaysia, Mexico and the United Kingdom will face a lower 10 per cent rate after adopting or committing to measures prohibiting imports linked to forced labour.

Reacting to the development, President of the Nigerian-American Chamber of Commerce, Sheriff Balogun, said the business community supported the global campaign against forced labour but believed diplomatic engagement with Washington offered the best route towards resolving the issue.

Balogun said the chamber did not view the measure as a hostile action but rather as an opportunity for Nigeria to demonstrate its commitment to responsible trade, transparent supply chains and international labour standards.

According to him, some Nigerian exporters will inevitably feel the impact of the tariff, particularly non-oil exporters such as agro-processors and small and medium-sized businesses dealing in cocoa products, cashew, sesame, leather and light manufactures.

He, however, pointed out that exemptions for key raw materials would cushion the impact on a substantial portion of Nigeria’s trade with the United States.

For smaller exporters operating on tight margins, Balogun noted, an additional 12.5 per cent cost could significantly affect competitiveness, pricing and business planning.

He expressed optimism that the tariff could eventually be reviewed, pointing to the lower rates granted to countries that have adopted or committed to measures addressing forced-labour imports.

Balogun said the Nigerian-American Chamber of Commerce would support the Federal Government’s engagement with the United States, work with American business partners and assist Nigerian exporters in improving supply-chain documentation and certification.

LCCI Calls for Urgent Assessment

The Director-General of the Lagos Chamber of Commerce and Industry, Dr Chinyere Almona, also warned that the tariff could directly affect Nigerian businesses exporting covered products to the United States.

According to Almona, the additional duty will increase the landed cost of Nigerian goods and could weaken their competitiveness against products from other countries in the American market.

She said exporters operating on thin margins and those heavily dependent on the US market would be particularly vulnerable, while the consequences could extend indirectly to logistics, manufacturing, agriculture, processing and other export-support sectors.

Almona, however, cautioned against making broad assumptions about the impact of the policy without determining precisely which Nigerian products and sectors are affected.

She called for an urgent product- and sector-level assessment to determine Nigeria’s actual exposure and the potential consequences for businesses, jobs and export earnings.

The LCCI chief urged the Federal Government to immediately engage the Office of the United States Trade Representative, review Nigeria’s trade and customs framework, strengthen enforcement against forced-labour imports, consult the private sector and accelerate efforts to diversify the country’s export base.

She also called for an early review, reduction or removal of the additional tariff.

Tariff Could Hit Export Competitiveness, Musa Warns

Chief Executive Officer of Widescope Group and member of the Nigerian-American Chamber of Commerce, Dr Segun Musa, similarly warned that the tariff would raise the landed price of Nigerian exports and weaken their competitiveness in the US market.

Musa acknowledged the right of sovereign nations to review their trade policies in pursuit of national interests but warned that the new measure could disrupt export projections for Nigeria and other affected economies.

He said the higher cost of exporting could affect employment, investment and foreign-exchange earnings if the measure persists.

Musa therefore urged the Federal Government to intensify diplomatic engagement with US officials, support exporters in improving competitiveness, develop alternative export markets and consider reviewing tariffs on selected US imports where Nigeria has competitive advantages.

CPPE: Don’t Overstate Economic Impact

However, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, offered a more measured assessment of the potential consequences.

In a policy brief, Yusuf said the immediate economic impact of the tariff on Nigeria was likely to be modest because the products affected represent only a small proportion of the country’s overall exports.

He noted that while some non-oil exporters, particularly businesses in agriculture and manufacturing, could lose competitiveness in the US market, Nigeria’s dominant export category to the United States remains outside the scope of the tariffs.

Yusuf said the development should therefore not be viewed primarily as an immediate threat to Nigeria’s overall export earnings or foreign-exchange receipts.

Instead, he argued that the tariff should serve as a warning about the changing nature of global trade, particularly the growing use of protectionist policies by major economies.

He called on Nigeria to strengthen labour standards, improve supply-chain transparency, deepen manufacturing and regional trade, diversify its export base and engage proactively with the United States through diplomatic and trade channels.

Nigeria Faces a Choice

The differing assessments from the private sector point to a common conclusion: the tariff may not pose a major immediate threat to Nigeria’s overall economy, but it could create significant difficulties for individual exporters and affected sectors.

For small and medium-sized exporters, an additional 12.5 per cent duty could make the difference between remaining competitive and losing market share.

The Federal Government therefore faces a dual task—protecting exporters from the immediate consequences of the measure while addressing the regulatory and labour-standard concerns underpinning the US policy.

Beyond seeking a review of the tariff, Nigeria will need to strengthen its export systems, improve documentation and supply-chain transparency, enforce labour standards and accelerate diversification into new international markets.

The bigger lesson may be that Nigeria cannot afford to rely heavily on a narrow range of commodities and markets.

As global trade becomes increasingly fragmented and protectionist, the country’s long-term competitiveness will depend on its ability to produce value-added goods, meet international standards and negotiate effectively with major trading partners.

For now, the 12.5 per cent tariff represents a headwind rather than an economic crisis. But how quickly Nigeria responds could determine whether the measure becomes a temporary setback—or a lasting obstacle for its exporters.