Nigeria vulnerable to US-China trade war, NESG warns

The Nigeria Economic Summit Group (NESG) has highlighted the impact of China-US trade war on the Nigerian economy, saying the country might be “adversely” affected.

The think-tank group however advised the federal government to hedge against the trade war between the two countries.

The advisory was contained in the NESG Foreign Trade Alert: 2024Q4 & Full Year 2024 released last week where it was stated that Nigeria’s external trade position “Witnessed a significant improvement in 2024.”

The US is currently at war with China and other countries with a series of tariffs imposed on them by President Donald Trump.

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According to NESG, China remained Nigeria’s largest trading partner in 2024Q4, followed by India, Belgium, the United States (U.S.), and France.

It noted that Nigeria remains vulnerable to trade protectionism in the U.S recalling that in February 2025, the U.S. imposed a 10 per cent tariff on Chinese imports and plans to add another 10 percent by April 2024.

Also, China has announced additional tariffs of 10-15 per cent on certain U.S. imports from March 10, 2025 and a series of new export restrictions for designated U.S. entities.

According to the NESG, the renewed trade war between the two world’s largest economies “Could disrupt global supply chains, stifle world trade growth, and push up the prices of globally traded commodities.”

Therefore, the report advocates the need to hedge against the trade war by diverting its trade pattern towards countries that are unaffected by the U.S. tariffs.

“This would reduce tariff-induced increases in import bills, considering that the country’s import-dependent non-oil industrial sector is highly vulnerable.

“In 2024Q4, the U.S. was not among Nigeria’s top five import trading partners. Developing domestic value chains and sourcing raw materials locally is also necessary to reduce the country’s external vulnerability.

“For instance, in 2024Q4, Nigeria’s raw material imports (N2.1 trillion) significantly outpaced exports (N0.7 trillion), reflecting the inadequacy of local production of raw materials and intermediate inputs.

The NESG report also stressed the need to redirect focus on non-oil export commodities, saying, “The rise in oil exports in 2024 reflects mainly the effect of exchange rate depreciation.

“However, sub-optimal domestic crude oil production in the recent past has made it difficult, if not impossible, for Nigeria to reap the gains from elevated global oil prices. This suggests the need to prioritise non-oil export commodities to diversify export proceeds and insulate the economy from external shocks,” he said.