Market News

BY Sami Tunji and Josephine Ogundeji

•Two months after Trump’s 10% tariff move, Nigerian exports suffer sharp decline

The trade relationship between the United States and Nigeria has suffered a significant setback, as official data from the US Census Bureau and the Bureau of Economic Analysis show that US imports of Nigerian goods decreased by $527m in the first five months of 2025 compared to the same period in 2024.

This represents a nearly 20 per cent year-on-year decline amid recent bilateral trade tensions between the two nations. In the corresponding period of 2024, the U.S. imported goods worth $2.65bn from Nigeria.

That figure fell sharply to $2.12bn between January and May 2025. The decline comes amid a wave of renewed protectionist measures spearheaded by US President Donald Trump, who signed an executive order on April 2, 2025, introducing a general 10 per cent import tariff on most countries.

Under this policy, known as the “Liberation Day” tariff framework, Nigeria was targeted with a higher tariff rate of 14 per cent due to its previous trade surplus with the US. Although Nigeria remains one of the US’s largest African trade partners, the impact of Trump’s renewed trade policy agenda is being felt.

Further pressure mounted when Trump threatened an additional 10 per cent tariff on countries seen to be aligning with the BRICS economic bloc, which includes Nigeria as a potential new member. The imposition of these tariffs appears to have discouraged US purchases of Nigerian products.

However, it is important to note that energy-related products, including crude oil — Nigeria’s main export — were explicitly exempted from these tariffs. Despite this exemption, the overall decline in Nigerian exports to the US indicates a broader slowdown, not limited to oil.

Other Nigerian exports, including agricultural and manufactured goods, have been affected by the uncertainty generated by the new trade policy. This shift is evident in the trade data, which shows that US imports from Nigeria in May 2025 stood at $400m, a sharp drop from $517m recorded in May 2024.

More importantly, even oil shipments, though not subject to the tariff, have shown signs of weakening, possibly due to market dynamics and shifting US sourcing strategies. Data from the first five months of 2025 show that the US imported 17.39m barrels of Nigerian crude oil, valued at $1.34bn based on customs value.

This marked a drop from the 20.4m barrels worth about $1.52bn imported during the same period in 2024. The decline in volume suggests a shift in US sourcing, perhaps reflecting competition from other producers or strategic reserve adjustments.

Despite the drop, Nigeria remained the largest supplier of crude oil to the US from Africa, ahead of Libya, Angola, and Ghana. In May 2025 alone, the US imported over 4.2m barrels of Nigerian crude, valued at $311m, down from $368m in April.

However, crude oil imports from Nigeria alone accounted for over 62 per cent of total US crude purchases from Africa in the first five months of 2025. By value, Nigeria’s oil exports to the US stood at $1.34bn (customs value) and $1.38bn (C.I.F. value), reflecting its central role in energy trade, even if overall exports have declined.

The rest of Africa contributed $811m in crude oil exports in the same period, with Libya, Angola, and Ghana trailing far behind Nigeria in both volume and value.

Yet, energy dominance is not translating into broader trade leverage for Nigeria. The limited diversification of its export basket, coupled with structural constraints such as port inefficiencies, regulatory bottlenecks, and weak industrial capacity, has curtailed Nigeria’s ability to expand beyond crude.

The PUNCH further observed that US exports to Nigeria increased significantly from $2.05bn in the first five months of 2024 to $2.42bn in the same period of 2025. This 17.8 per cent growth in US exports, combined with the fall in imports, led to a complete reversal in the trade balance between both countries.

It is important to note that the US also maintains a strong export relationship with Nigeria in the automobile sector. Data show that in the first five months of 2025, the US exported $426m worth of motor vehicles and parts to Nigeria.

This included $312m worth of passenger cars, $29m worth of trucks and buses, and $86m in parts. The sector alone accounted for nearly 18 per cent of total US exports to Nigeria, highlighting the importance of the Nigerian consumer market for American manufacturers.

In May 2025, the US shipped $95m worth of motor vehicles and parts to Nigeria, slightly lower than the $100m recorded in April but still indicative of consistent demand.

The breakdown shows $70m in passenger cars, $7m in trucks and buses, and $19m in parts. These figures highlight the continued appetite for imported vehicles in Nigeria.

The PUNCH further observed that while the US had a trade deficit of $596m with Nigeria in the first five months of 2024—meaning Nigeria exported more to the US than it imported—that position flipped in 2025.

By the end of May 2025, the US held a $295m surplus over Nigeria. This swing in trade balance marks a turning point in US–Nigeria trade relations, as Nigeria transitioned from a net exporter to a net importer in the bilateral context.

The monthly trend confirms this reversal. In May 2025 alone, the US exported $515m in goods to Nigeria while importing just $400m, giving the US a surplus of $115m for the month. This is in contrast to May 2024, when the US posted a deficit with Nigeria, importing more than it sold.

Nigeria’s position in the broader context of US–Africa trade also appears to be under pressure. In terms of exports, Nigeria accounted for roughly 14.8 per cent of total US goods exported to Africa between January and May 2025, down slightly from its share the previous year.

On the import side, Nigeria represented about 10.8 per cent of US imports from Africa. Although Nigeria remains among the top three African trading partners of the US, its influence is diminishing as other nations like Egypt and South Africa strengthen their trade flows with Washington.

Egypt has emerged as the United States’ leading African export destination, with US exports to Egypt hitting $3.43bn in the first five months of 2025, up from $1.95bn in the same period of 2024.

This dramatic increase highlights Egypt’s growing role in Africa–US economic relations. Meanwhile, South Africa continues to dominate US imports from the continent. The US imported $8.67bn worth of goods from South Africa between January and May 2025—more than four times what it imported from Nigeria—while exporting just $2.71bn to that country.

In comparison, Nigeria’s total trade volume with the US now stands at approximately $4.54bn for the year-to-date period, falling behind both Egypt and South Africa. The slower growth in non-oil trade suggests that Nigeria is struggling to retain its position as a top-tier economic partner of the United States.

The PUNCH earlier reported that Nigeria’s trade with BRICS countries jumped to N5.41tn in the first quarter of 2025, more than three times higher than the N1.54tn recorded from exports to the United States

The figure shows a major pattern in Nigeria’s trade strategy towards emerging markets, but comes at a time when the United States has threatened to impose an additional 10 per cent tariff on BRICS-aligned nations, a move that could raise Nigeria’s total US-bound tariff exposure to 24 per cent.

This came as some members of the Organised Private Sector stated that the US threat of a 10 per cent tariff on BRICS-aligned nations and a 25 per cent tariff on Japan and South Korea signals rising global trade tensions that could indirectly affect Nigeria’s private sector.

The President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, earlier said the US threat of a 10 per cent tariff on BRICS-aligned nations and a 25 per cent tariff on Japan and South Korea signals rising global trade tensions that could indirectly affect Nigeria’s private sector.

“As global supply chains adjust and trading blocs realign, Nigerian businesses, especially those reliant on imports from affected countries, may face increased costs and volatility in sourcing raw materials, equipment, and technology.

“However, this shift also presents opportunities. With the African Union countering the US approach by strengthening AfCFTA, Nigeria has a chance to deepen regional trade and attract more investment from BRICS countries seeking alternative markets. This could create new export pathways and position Nigerian businesses to serve a larger African market, reducing overdependence on traditional trading partners.

“To benefit, Nigeria must act fast, supporting local production, improving trade infrastructure, and adopting policies that align with AfCFTA goals. The private sector must stay agile, competitive, and innovative to seize emerging opportunities while mitigating external risks. This is a defining moment for Nigeria to reposition itself as a key player in the evolving global trade landscape,” he said.

However, the Senior Special Assistant to President Bola Tinubu on Foreign Affairs and Protocol, Mr Ademola Oshodi, said Nigeria’s involvement with BRICS is based on ideological and strategic alignment but not formal membership.

Oshodi described Nigeria’s BRICS partnership as “bigger than any other South-South cooperation framework, next only to the United Nations,” and emphasised that it gives Nigeria a seat at the table with major global players like China, India, and Russia.

He clarified that Nigeria is currently a partner country, not a full member, and as such, cannot vote or sign communiqués within the BRICS structure.

He dismissed fears that the US tariff threat would affect Nigeria, stating, “That 10 per cent policy is more of an assurance right now, it’s not yet an American policy… We’re not a full BRICS member. So, this should not affect us regardless of our ideological similarities.”

He further noted that Nigeria enjoys a strong and symbiotic relationship with the global North, particularly the United States, the European Union, and the United Kingdom.

“Our biggest trading partners are with those countries before we go down to India and others,” he said, adding that Nigeria continues to engage constructively with the West on trade, climate change, and diplomatic cooperation through platforms like the Commonwealth, United Nations, and G20.

NASSI reacts

The National Vice President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, stated that from the moment President Trump announced the tariffs, it sent shock waves through the global economy, which created a state of uncertainty.

He said, “Of course, from the moment President Trump announced the tariffs, it sent shock waves through the global economy. The announcement alone created a high level of uncertainty, and that’s something markets don’t respond well to. Markets react negatively to unpredictability, and so do investors. In fact, the US stock market lost nearly a third of its value within just a few days of the announcement, evidence of the kind of disruption the policy triggered.

“The confusion created by the tariffs rippled through the global trade environment. Exporters were unsure of the rules, and many adopted a ‘wait and see’ attitude. It’s no surprise that Nigeria’s exports to the US are seeing a decline. You may remember that Trump once promised to sign a trade agreement in 90 days, but to date, I doubt that even five have been signed. That kind of inconsistency has real consequences for trade.

“Now, how does this affect Nigeria? Significantly, over 90 per cent of our exports are oil-based, but we’ve been making efforts to diversify and grow our non-oil exports. This kind of global uncertainty undermines those efforts. It hits our emerging non-oil export sector hard and delays the progress we’ve been working toward. Without clarity on who pays what and under what trading terms, it’s difficult for exporters to plan or expand.”

Kuti-George continued by stating that this situation should serve as a wake-up call. “It reminds us that we need to focus inward. We must begin to consume what we produce. We need to develop and rely on our own industries and resources. In essence, we are what we make. We must use what we grow and invest in what we already have.

“Even US immigration policies reflect this shift. Today, if you apply for a US visa, you may get only a three-month single-entry visa. That means one trip, and if you want to go again, you must reapply. All of these developments point to one thing: Nigeria must put its money where its mouth is. We must invest in our own capacity, infrastructure, and innovation.

“If we want to weather the storms of global politics and economic shifts, we need a solid foundation at home by growing what we have. And we already have what it takes. We just need to believe in ourselves and act accordingly.”