* Insists BRICS Nations Get 10% Tariff ‘Pretty Soon’
* Analysts Weigh Impact On Nigeria’s Economy
U.S. President Donald Trump said on Tuesday the U.S. would “pretty soon” charge a 10% tariff on imports from BRICS countries, drawing another complaint from Brazil President Luiz Inacio Lula da Silva, who just hosted the bloc’s annual summit.
Trump, who raised the tariff threat on Sunday, said in a Tuesday cabinet meeting at the White House that the duty was on the way: “Anybody that’s in BRICS is getting a 10% charge pretty soon … If they’re a member of BRICS, they’re going to have to pay a 10% tariff … and they won’t be a member long.”
The BRICS group expanded last year beyond Brazil, Russia, India, China and South Africa to include members such as Iran and Indonesia. Leaders at the summit in Rio de Janeiro voiced indirect criticism of U.S. military and trade policies.
Asked about Trump’s tariff threat, Lula told journalists at the BRICS summit on Monday that the world does not want an emperor.
After a state visit from Indian Prime Minister Narendra Modi, Lula on Tuesday expressed further disagreement.
“We will not accept any complaints about the BRICS summit. We do not agree with the U.S. president insinuating he’s going to put tariffs on BRICS countries,” he told journalists in Brasilia.
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Trump gave no specific date for the BRICS tariff to kick in. On Monday, a source familiar with the matter said the Trump administration would charge the tariff only if countries adopted anti-American policies, differentiating actions from statements like the one adopted by the BRICS leaders on Sunday.
Trump claimed without evidence on Tuesday that the group was set up to hurt the United States and the U.S. dollar’s role as the world’s reserve currency. He said he would not allow that to happen.
“BRICS was set up to degenerate our dollar and take our dollar … take it off as the standard,” he said. “And that’s okay if they want to play that game, but I can play that game too.”
Trump said losing the dollar’s role as the world’s reserve currency would be like “losing a war, a major world war. We would not be the same country any longer.”
Brazil in February nixed plans for a common currency agenda during its presidency year.
Effects On Nigeria’s Economy
Trump’s threat to impose tariffs on BRICS nations has raised concerns about the potential impact on Nigeria’s exports and economy.
Metrobusinessnews.com gathered that although the president mentioned 10 percent tariff rate, the actual threat was to impose a 100% tariff on BRICS nations’ exports if they attempt to replace the US dollar as the dominant currency in international trade.
Be that as it may, imposing high tariffs on Nigerian exports to the US would make them more expensive and potentially less competitive in the US market.
More worrisome is the fact that, it will affect the demand of Nigeria’s major foreign exchange earnings, oil, if it is among the affected products, compounding the country’s economic woes, ocassioned by inability to meet her quota despite expected world output from the OPEC+ members.
Also, some analysts say higher prices due to tariffs could lead to reduced demand for Nigerian products in the US, thereby affecting export-oriented industries like agriculture and manufacturing.
With over 80% of the country’s foreign exchange earnings, the further argue that tariffs and trade wars could emerge leading to oil price volatility, affecting Nigeria’s budget and economic stability
“Trump’s tariffs could lead to inflationary pressures in Nigeria, disrupting manufacturing sectors and slowing economic growth. It can also lead to heightened trade tensions snd consequently, capital flight from emerging markets like Nigeria to more stable economies, depreciating the Nigerian Naira and increasing the cost of foreign loans,” says an analyst.
Besides, the instability in global trade could create uncertainty for multinational corporations operating in Nigeria, potentially affecting job creation and technology transfers,” he added.
Way Out
The analysts were unanimous in their submissions that the development provides opportunity for the mouthed diverdification that has been on the drawing boards of successive past administrations, without the political will.
To them, strengthening non-oil sectors like agriculture, technology, and manufacturing can reduce the country’s vulnerability to global trade shocks, and as well as leveraging on the benefits from the African Continental Free Trade Agreement (AfCFTA) to boost intra-African trade and reduce reliance on Western and Chinese markets.
Similarly, government, they added, needs to invest more in infrastructure and improvement in the ease of doing business, so as to enhance Nigeria’s ability to capitalize on shifting global trade dynamics.
