Analysts Warn Fresh US 12.5 Per Cent Tariff Will Hurt Nigerian Exporters

•Urge FG to tighten labour standards, diversify export markets 

•CPPE links action to Trump’s trade war with China 

•Say Dangote Refinery, MSMEs may face fresh pressure

Dike Onwuamaeze and Sunday Ehigiator

Economic experts have warned that the United States’ decision to impose a 12.5 per cent tariff on Nigerian imports could undermine the country’s export competitiveness, squeeze businesses and weaken foreign exchange earnings.
They described the action as a fresh challenge for exporters, particularly manufacturers and small businesses seeking access to the US market.

While some analysts linked the move to the Trump administration’s broader protectionist trade agenda, others urged the federal government to strengthen labour standards and diversify export destinations. They also cautioned that failure to address these concerns could further erode Nigeria’s position in global trade.
The United States yesterday imposed a 12.5 per cent tariff on imports from Nigeria over what it described as the country’s failure to effectively prohibit the importation of goods produced with forced labour, a move expected to put additional pressure on Nigerian exporters and policymakers.

The new tariff, announced by the Office of the United States Trade Representative (USTR), was part of a broader trade measure affecting 60 economies investigated under Section 301 of the US Trade Act.
The action follows months of investigations into the labour practices of America’s major trading partners.
According to the USTR, Nigeria falls into the category of countries that have not “imposed and effectively enforced a prohibition on the importation of goods produced with forced labour,” thereby attracting a higher tariff rate of 12.5 per cent.

By contrast, countries such as India, Indonesia, Malaysia, Mexico and the United Kingdom will be subjected to a lower 10 per cent tariff after implementing or committing to enforce import bans on goods linked to forced labour.

The USTR said the investigations, launched in May 2026, involved more than 1,600 written submissions, public hearings featuring over 100 witnesses, and consultations with more than 45 governments before the final determination was reached.
In a Federal Register notice, the agency stated that Nigeria’s exports would attract the 12.5 per cent tariff, except for products covered under specified exemptions.

It stated: “Based on the findings in the investigation of Nigeria, considering the public comments, testimony, and the advice of the Section 301 Committee, as well as the advice of advisory committees, and in accordance with the specific direction of the President, the Trade Representative has determined to impose 12.5 percent tariffs on products of Nigeria, except as provided in Annex I and Annex II, Part A, of this Notice.

“The Trade Representative has determined, in accordance with the specific direction of the President, that the tariff rate to be applied, and the scope of tariffs and exemptions, are appropriate to obtain the elimination of the acts, policies, and practices determined to be actionable in the investigation.”

The latest measure comes after US President Donald Trump invoked Section 122 of the Trade Act of 1974 to impose a temporary universal tariff on imports following a US Supreme Court ruling that blocked his administration’s broader tariff initiative under the International Emergency Economic Powers Act.
US Trade Representative Jamieson Greer said the action was intended to encourage trading partners to adopt stronger safeguards against forced labour.

“President Trump recognises that decades of moral suasion have not eradicated forced labour from global supply chains,” Greer said.
“The United States has had a forced labour import ban for nearly a century. It’s well past time for our trading partners to do the same.”
The USTR clarified that the tariffs would not apply to certain exempted products, including raw materials whose restriction could trigger domestic supply shortages, goods capable of causing economy-wide disruptions, products unavailable in sufficient quantities within the United States or from alternative sources, and selected goods from countries that have already adopted or pledged to implement forced labour import bans.

The agency also noted that additional exemptions were granted where tariffs were considered unlikely to eliminate the trade practices under investigation.

Reacting to the development, the Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE) Dr. Muda Yusuf, said the reason for the new wave of tariff cannot be supported by data and described it as a deliberate design by President Donald Trump’s administration to penaslise countries doing serious business with China.

Yusuf told THISDAY that China is Nigeria’s biggest trading partner for import of non-oil products.

He said that the latest tariff has implications for Nigeria because significant portion of our exports, especially oil and gas, go to the United States of America.

He added that Dangote Refinery that is exporting refined petroleum products to the USA may be affected.

Yusuf said the tariff was unnecessary because import and export decisions are made by businesses based on where prices and their products are competitive.

He also said its impact on exports to the USA will have implications for Nigeria’s balance of trade.

According to him, it was necessary for Nigeria to announce retaliatory measures against the United States.

He advised that, “ours is to continue to look for multiple sources of export markets for our products.

“It is a question of diversifying our export destructions.”

An Emeritus Professor of Economics, Prof. Akpan Hogan Ekpo, saw the new tariff as manifestation of Trump’s obsession with tariffs.

Ekpo said Trump was looking for new ways to sustain his tariff wars after the Supreme Court of the United States of America quashed his earlier irrational tariffs.

He said: “The tariff does not make sense. It will only compound global uncertainties that were stoked by Trump’s war in Iran.

“Crude is our major export, so it will affect in a way that may create revenue problem for our economy that is trying to recover from earlier global shocks caused by Trump.

“It will increase the cost of doing business for the MSMEs, which is the engine for economic growth and job creation.”

He also advised government to support MSMEs that might be affected by the new trade tariff.

“The government needs to step in and bridge that gap by providing a cushion for the MSMEs to ensure that the economy does not run around.”

Chief Executive Officer and Founder of Bam Holiday Services Ltd, Babajide Tijani, warned that the higher tariff would significantly affect Nigerian exporters by eroding their profit margins and reducing their competitiveness in the US market.
According to him, “This tariff increase will affect exporters. This will make them see thinner margins. They will be forced to sell at higher prices, which will make them lose competitiveness.”
Tijani, however, the development could also serve as a wake-up call for Nigeria to strengthen its labour regulations if it hopes to enjoy lower tariff rates in future.

“Looking at the bigger picture, Nigeria will be pressured to tighten labour-standard enforcement if it wants to move into the 10 per cent tariff bracket like countries such as the United Kingdom and India,” he said.
He further noted that the burden would fall disproportionately on smaller businesses.

“Small exporters with already thin margins are now more vulnerable than large commodity exporters who can renegotiate contracts or shift volumes,” Tijani added.