Muda Yusuf, the chief executive officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), says the ongoing United States (US) trade tariff war creates opportunities for Nigeria in exports and investments.
In a statement on Sunday, Yusuf explained the multi-dimensional implications of the US President Donald Trump administration’s policies on the Nigerian economy.
On February 2, Trump signed economic orders imposing significant new tariffs on Canada, Mexico, and China, which are the biggest trading partners of the US.
Yusuf explained that the sweeping imposition of trade tariffs on major US trading partners could weaken the global economic growth outlook, dampen global oil demand, and depress oil prices.
He also said the prospect of high inflation in the US due to the ongoing tariff war increases the likelihood of imported inflation from the US for products shipped to Nigeria.
“The Trump administration has demonstrated an unequivocal commitment to the ideology of economic nationalism, protectionism, deglobalisation, unilateralism and reciprocity, and fragmentation of the global economy,” he said.
“This has unleashed a flurry of retaliatory trade policy actions from a number of countries across a wide range of product groups, even by the close allies of the United States.
“Given the current trade policy disposition of the Trump Administration, AGOA faces the prospect of being terminated. Although Nigeria has very little to show for the opportunities offered by AGOA.
“Meanwhile, the tariff war offers some opportunities for export and investment for Nigeria, taking advantage of the gaps that the trade war may create in the countries involved, to the extent that Nigeria is not a victim of the tariff actions.
“There is the prospect of high inflation in the USA as a result of the current tariff war.
“This thus creates a possibility of imported inflation from the USA for products imported from USA to Nigeria.”
The African Growth and Opportunity Act (AGOA) is a legislation approved in May 2000 by the United States congress to assist the economies of sub-Saharan Africa and to improve economic relations between the US and the region.
Yusuf explained that the trade war may create export opportunities for Nigeria by filling supply gaps that the tariff war could leave in the American market.
He said Nigerian companies could position themselves strategically to benefit from the imminent supply gaps.
“New bilateral and multilateral trade alliances are likely to evolve due to the ongoing trade war,” Yusuf said.
“The trade war may trigger a disruption of global supply chains, which may adversely affect the global economy, especially from a cost of supplies perspective for imported goods.
“President Trump perceives members of BRICS and their allies as United States adversaries, seeking to reverse the dominance of the dollar in the global financial order.
“This perception could shape the disposition of the Trump administration towards these countries.”
The CEO further explained that Diaspora remittances could be affected by the current immigration policy of the Trump administration.
Yusuf added that the United States has a huge number of diaspora Nigerians, estimated at 500,000, many of whom could be affected by the current immigration policy on documentation.
