Nigeria Considers Strengthening Trade Ties with China, EU, and BRICS in Response to US Tariffs

In response to the imposition of new US tariffs, Nigerian fund managers from Cory Assets Management Limited, led by Johnson Chukwu, suggest that Nigeria may seek to strengthen its trade ties with China, the European Union, and BRICS nations (Brazil, Russia, India, China, and South Africa). This strategic shift comes as US tariffs threaten to undermine Nigeria’s position under the African Growth and Opportunity Act (AGOA), a key trade agreement that has granted Nigeria duty-free access to the US market. The move could reshape Nigeria’s trade relations, particularly with emerging markets.

The tariffs, introduced by the US under a protectionist agenda aimed at addressing trade imbalances, have already caused disruptions in financial markets and raised concerns globally. Nigeria, which has historically benefited from AGOA in sectors like textiles, agriculture, and manufacturing, is facing significant challenges as the tariffs may reduce its export competitiveness, jeopardizing a trade surplus of $1.5 billion with the US. Additionally, the protectionist measures could undermine Nigerian exporters, particularly in textiles and manufacturing, sectors that have thrived under the AGOA framework.

Economists warn that the tariff hike could destabilize global economic growth and escalate tensions between major trade powers. Countries such as China and the European Union have signaled their intention to respond with countermeasures, leading to fears of a wider trade war. For Nigeria, this could mean a recalibration of its foreign policy to foster closer economic relationships with alternative partners, such as China and the BRICS countries, as well as enhancing regional cooperation within ECOWAS and the African Union.

Beyond trade, Nigeria’s macroeconomic outlook is also at risk. The tariffs could lead to reduced export earnings, particularly from non-oil sectors, exacerbating Nigeria’s foreign exchange challenges. This may result in inflationary pressures as the country faces higher import costs for essential goods like wheat, pharmaceuticals, and machinery. The situation also puts pressure on Nigeria’s foreign reserves and may require strategic shifts in its foreign and economic policies to maintain stability amidst growing global trade tensions.