Nigeria’s trade deficit with U.S. raises economic concerns amid Trump’s tariff war

Nigeria is among the 48 countries running a trade deficit with the United States, a key economic partner for Africa’s largest economy.

This revelation comes as U.S. President Donald Trump escalates his aggressive trade policies, imposing tariffs on major global partners, sparking widespread economic concerns.

In a move that has rattled international trade, President Trump has introduced hefty tariffs targeting Canada, Mexico, and China—countries he claims are responsible for illegal immigration and drug trafficking, including fentanyl, into the U.S.

As of February 4, 2025, all Canadian and Mexican imports will face a 25% tariff, while Chinese goods and Canadian oil will be hit with a 10% tariff.

In response, Canada’s Prime Minister, Justin Trudeau, has announced retaliatory tariffs of 25% on U.S. goods worth up to C$155 billion. Mexico and China are also preparing to counter with similar measures, raising fears of a full-blown global trade war.

Although Nigeria is not directly targeted by these tariffs, its trade relationship with the U.S. remains critical. 2024 U.S. trade data shows Nigeria exported $5.29 billion worth of goods to the U.S., while importing $3.88 billion, resulting in a $1.4 billion trade surplus for Nigeria. Total trade as of September 2024 stood at $9.1 billion.

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In contrast, 2023 trade figures between Nigeria and the U.S. totaled $8.27 billion, with Nigeria holding a $3.1 billion surplus.

However, trade volumes have dropped significantly—by 73% over the past decade—largely due to the U.S. slashing its crude oil imports from Nigeria.

A historical comparison paints an even more striking picture. In 2011, total trade between both nations peaked at $74 billion, with Nigeria enjoying a $14 billion trade surplus. Between 2005 and 2014, total trade amounted to $281.7 billion, with Nigeria running an impressive $200.2 billion trade surplus.

Despite this decline, the United States remains a key economically, with American foreign direct investments (FDI) focused primarily on petroleum, mining, and wholesale trade sectors. Nigeria is also the second-largest U.S. export destination in Sub-Saharan Africa.

Additionally, Nigeria’s booming entertainment industry, particularly Nollywood, has attracted significant investment from U.S.-based film and media companies.

Economists and trade analysts are urging Nigeria to reassess its trade strategies with the U.S. to mitigate risks from declining trade volumes.

Economic analyst Dr. Tunde Adebayo warns, “The dwindling trade volume is concerning. If Nigeria does not diversify its exports beyond crude oil, we risk further economic shocks. This is a wake-up call for policymakers to enhance manufacturing and non-oil exports.”

Trade expert Professor Mary Akande also highlights the importance of leveraging trade agreements: “Nigeria must maximize the benefits of the African Growth and Opportunity Act (AGOA). This preferential trade agreement provides Nigerian businesses access to the U.S. market, but underutilization remains a major issue.”

Nigeria’s Minister of Industry, Trade, and Investment, Mrs. Jumoke Oduwole, has assured that President Trump’s trade policies pose no immediate threat to Nigeria’s economy. However, the government is closely monitoring developments.

Meanwhile, Sunday Dare, Special Adviser on Media and Public Communications to President Tinubu, has called for a new economic approach. “We are witnessing a global shift—‘America First,’ ‘Canada First.’ It’s time for ‘Nigeria First!’ Let’s prioritize Nigerian interests in every trade negotiation.”

As the U.S. continues its aggressive trade policies, Nigeria has a crucial opportunity to redefine its trade priorities, strengthen its economy, and ensure long-term sustainability in global commerce.