CPPE explains why 12.5% US tariff is unlikely to hurt Nigeria

Nigeria is unlikely to suffer a significant economic impact from the United States’ new 12.5% tariff because crude oil, liquefied natural gas and other petroleum products remain exempt from the measures.

This is according to a policy brief signed by the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, on Sunday.

The organisation said the exempted products account for more than 80% of Nigeria’s merchandise exports to the United States, meaning the bulk of the country’s exports to the market would remain unaffected.

What the CPPE is saying

The CPPE said the tariff’s impact on Nigeria would be limited by the composition of the country’s exports to the United States and the relatively small share of total exports destined for the American market.

The organisation said some non-oil exporters, particularly those in agriculture and manufacturing, could face reduced competitiveness in the U.S. market.

• “From Nigeria’s perspective, however, the economic impact of the tariffs is unlikely to be significant.”
• “The first reason is that Nigeria’s exports to the United States are heavily concentrated in crude oil, liquefied natural gas and other petroleum products, which account for more than 80% of Nigeria’s merchandise exports to the U.S.”
• “These products have been exempted from the tariff measures, leaving the bulk of Nigeria’s exports unaffected.”
• “The greater challenge lies not in the immediate loss of export opportunities, but in navigating an increasingly fragmented and protectionist global trading environment,” Yusuf stated.

The CPPE said some non-oil exporters, particularly those in the agricultural and manufacturing sectors, could face reduced competitiveness in the U.S. market, although the overall impact on Nigeria’s export earnings and foreign exchange receipts is expected to be modest.

Back story

Nairametrics earlier reported that Nigeria has been hit with a 12.5% tariff on exports to the United States, placing it among 38 countries affected by Washington’s latest trade measures aimed at curbing imports linked to forced labour and addressing unfair trade practices.

The tariff was announced by the Office of the United States Trade Representative (USTR) in a July 23 statement issued by U.S. Trade Representative Jamieson Greer, which unveiled revised import duties ranging from 10% to 12.5% on goods from several major trading partners.

The latest move is part of the Trump administration’s efforts to rebuild a near-global tariff system after the US Supreme Court struck down the president’s previous “reciprocal” tariffs imposed under a national emergencies law.

Under the latest tariff schedule, Nigeria’s 12.5% rate is higher than the 10% tariff imposed on several countries, including the United Kingdom, Canada and India.

More Insights

Nigeria’s trade data also suggests that the country’s exposure to the new U.S. tariffs is limited compared with its exposure to other major export markets.

• The CPPE said total Nigerian exports stood at approximately N21.6 trillion in the first quarter of 2026, with the United States accounting for 5.56%.
• The organisation further noted that the United States ranked as Nigeria’s fifth-largest export destination, behind India, which accounted for 13.09% of Nigeria’s exports, France with 9.29%, the Netherlands with 9.22%, and Spain with 7.68%.
• The CPPE said these trade patterns significantly reduce Nigeria’s overall exposure to the new tariff regime.
• The organisation added that the affected non-oil products account for only a small share of Nigeria’s total exports, while the dominant export categories to the United States remain outside the scope of the tariffs.

The CPPE advised Nigeria to strengthen labour standards, improve supply-chain transparency and engage proactively with the United States through diplomatic and trade channels.

What you should know

The United States had earlier announced a baseline 10% tariff on all imports in April 2025, alongside country-specific reciprocal tariffs targeting nations that impose higher duties on American goods.

• The Section 301 framework is expected to face less legal risk because the law has survived previous court challenges.
• The new duties will replace the temporary 10% tariff that was due to expire at 12:01 a.m. EDT on Friday.

The new framework also comes amid continuing trade tensions with China. US officials have told Chinese counterparts that Washington intends to rebuild Trump’s second-term tariffs on Chinese goods to 20%, in line with a trade truce agreed with President Xi Jinping in November 2025.