Donald Trump, the United States president, has slammed a 14 per cent tariff on all Nigerian goods entering the United States.
This was announced yesterday as his much talked about “Liberation Day” tariffs comes into immediate effect.
Trump had threatened that countries would face a tariff rate at half the level they charge the US, as deemed by the White House, with a minimum tariff rate of 10 percent.
The calculation, he said, included non-monetary trade barriers and currency manipulation.
The 14 percent tariffs imposed on Nigeria, according to Trump, is against 27 percent charged to the US by Nigeria.
Nigerian authorities have not yet reacted to the new tariffs by Trump.
It is also not clear how the new measures would affect trade between the two countries and the cost of goods coming into the country from the United States.
The new tariffs, which affected 185 countries, have effectively ended months of anxious wait and uncertainty, which had impacted stocks around the US, Europe and Asian markets.
Trump’s moves, which he said is reciprocal, have triggered anxiety across the globe, leading to escalation of a trade war that also includes plans to impose 25 percent tariffs on all foreign-made vehicles this week.
Trump also imposed a baseline tariff of 10 percent across all countries, while upping the duties for various partners whom he described as bad actors with country like Lesotho getting as much as 50 percent levies on their exports to America.
While unveiling the reciprocal tariffs, Trump stated he could have gone higher by imposing higher tariffs to match what each country charges to US.
“The tariffs will be not a full reciprocal,” he said. “I could have done that, yes, but it would have been tough for a lot of countries who didn’t want to do that.”
He announced that auto tariffs of 25 percent will go into effect tomorrow as planned.
Nigeria’s export to the US totals about N4.59 trillion annually.
Trump’s tariffs increase is aimed at discouraging imports and reinvigorate domestic production. Analysts believe that Trump’s tariffs increase may not adversely affect Nigeria’s export to the US because they are mainly tropical agricultural produce which may not be significant.
However, with increasing volume of importation of crude oil by Dangote Refinery from the US, the trade balance may likely tilt in favour of that country.
It is not yet known how other trading partners would react to Trump’s tariffs increase, but it is likely majority of countries, especially China, Canada and Japan will reciprocate with harsher tariffs on US exports to their countries.
