US President Donald Trump has slammed a 14 percent reciprocal tariff on all Nigerian goods entering the US as the much talked about “Liberation Day” tariffs comes into effect.
Trump had said 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, saying that the calculation 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.
The new tariffs, which affected 185 countries, has therefore, ended months of anxious wait and uncertainty, which had plummeted stocks around the US, Europe and Asian markets.
The moves today are the latest escalation of a trade war that also includes plans to impose 25 percent tariffs on all foreign-made vehicles this week.
Accordingly, Trump slammed 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 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.”
Auto tariffs of 25 percent will go into effect tomorrow as planned.
Vanguard had reported that Nigeria’s total N4.59 trillion exports to the United States may be threatened as a result of the new tariffs.
But commenting on the tariff imposition, Mr. David Adonri, Vice Chairman, Highcap Securities, posited that American consumers would bear the brunt of the new tariff “if the goods Nigeria exports to the US have high price elasticity of demand”.
“President Trump is increasing the tariffs to discourage imports and reinvigorate domestic production. The increase in tariffs may not adversely affect Nigeria’s export to the US because they are mainly tropical agricultural produce.
“US trade with Nigeria is not significant, hence increase in tariffs may not affect Nigeria’s exports,” he said.
“With increasing volume of importation of crude oil by Dangote Refinery, the trade balance may be in favor of the US now.
“If the goods Nigeria exports to the US have high price elasticity of demand, the Americans will bear the extra cost arising from the tariff hike,” Adonri added.
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