The tariff war has shaken global business scene in the last few days with US President Donald Trump at the epicentre of the epic trade holocaust. In a tit for tat, China and the European Union have slammed egregious tariffs on all American exports. The impact has been cancerous to other countries whose exports find consumption in some of the world?s dominant markets. To provide perspectives to the development, the Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, explained how the global tariff war affects Nigeria and the resonating impact on the African Growth and Opportunity Act (AGOA), a US trade law that provides duty-free access to the US market for eligible products from sub-Saharan countries. He was a guest on Channels Television?s The Morning Brief programme.

Enjoy the excerpts?

The US initially slammed a 14% tariff on Nigeria and later lowered it to 10% within its 90-day pause. What does this mean for Nigerian manufacturers and exporters to the US?

Generally speaking, what Trump is doing is shaking the table in line with his strategic objective of making America come first in all things. That said, Tariff all over the world is used to achieve several purposes. I think for his, it is to directly grow domestic manufacturing and restrict imports because, for a long time, according to him, people have been taking America for a ride. But for us in Nigeria, in terms of manufactured exports, we are only beginning to make inroads as also part of our own strategic objective of mitigating the impact of forex. So, there is a stumbling block in one of the countries that we are expecting to make in-roads.

The AGOA is ending in September 2025, and we are yet to make sufficient inroads compared to South Africa, Kenya and so on. And now, you throw a spanner in the works. So, for us as manufacturers, it?s a major issue. We know that when there are retaliatory measures, there will be collateral damage as in the case between America and China; it?s going to lead to an uptick of the duties.

Even if you are not suffering directly, you suffer indirectly. Taking all of this together, it becomes source of worry for us, and we are hoping that we?ll be able to find local sucour that will allow us to be moderately impacted and not severely impacted because if our government retaliates, we are also going to suffer because we import capital goods from those countries.

So, we are worried, and the only relief came when we had the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, said that there?s going to be a conversation among the economic team involving the private sector on how Nigeria should respond to it. Even lowering it to 10% is still a source of worry because we are operating in a positive balance of trade with America before then. Just January 2025, America had a net negative balance of trade of up to $143 million. So, we shouldn?t relent in our effort to cope with even this 10% because it wasn?t there before, especially for the more than 6,000 items that are qualified under AGOA. It?s not yet uhuru and we shouldn?t breathe too much so that we slumber.

It looks like the AGOA has been pushed aside and Trump?s tariff is what is in is in play now.

Yeah, unfortunately so and I was wondering why America is so easy to bend, I mean because AGOA was a valid agreement with 54 plus countries in Africa and how an executive order or a pronouncement or a tweet on X will just upturn the thing is a source of worry. Nigeria has to think very well, government has to engage the private sector and all players. We must go granular in the kind of exchanges we have because the next person after Trump might be worse. We really need to be very strategic in the way we respond to this.

So, are you worried extensively about the policy flip-flop in that sense globally? How should Nigeria prepare for eventualities like this because this is a precursor to anything that could happen anytime in the world?

The response that Nigeria is going to give must take into consideration that there is no way you can beat an efficient and conducive business environment for domestic industries. I believe that it builds resilience, and it allows even the intelligence that the private sector has to count because no matter what intelligence you have, no matter what strategies you have, government policy will trump it.

It Is important that in building resilience and readiness we should ensure that the domestic environment is supportive; supportive regulations, assurance of policy and all of that. We need to hold regulatory agencies in check to improve competitiveness, for any eventuality because there will always be surprises.

For instance, at this moment, the Standard Organisation of Nigeria must be on high alert, the Nigerian Ports Authority that is dangling 15% increase in port fees should just forget it now and never think about it, the 4% free-on-board that Customs is talking about should just be, in fact we should assume we never had it.

We should build a robust sector, a productive sector that will be able to respond to this eventuality. You can imagine if Trump has continued with this. I?m telling you our export will just come to nothing. Many people think, okay, because America is the sixth in terms of our export, and even China is closing at 3 trillion, I think America is doing 5.5 trillion but they are the sixth in terms of our trading partner, you can imagine that the number one to five countries are badly impacted by Trump and we are going to suffer collateral damage. So, there is nothing you can do other than preparing in-house.

So, what are the lessons for Nigeria and other African countries and what is the role of the African Continental Free Trade Area (AfCFTA) in the first place?

Happily, things have actually been working well for Nigeria in Africa. For instance, last year we traded more within Africa than with any other nation on earth. I think our trade was up to 8.7 trillion naira with Africa whereas it was 5.5 with America even China was 3 trillion, so I think that we are already set on a trajectory of making AfCFTA work for our exports and our imports. I believe that?s very important and in terms of lessons we should know that growing in African trade is probably the best way for us to survive as individual countries and for Africa to project and make inroads in international trade. We should make no mistake that the world doesn?t just need America, America needs the world and it?s been said that President Trump may just be overestimating his power, his influence and importance because it looks like there?s a new world order already and America may be punching above its weight. (Channels TV)

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