President Donald Trump’s return to the White House has ushered in a series of bold trade policies, including the imposition of new tariffs on various countries. His strategy of leveraging tariffs as a tool to benefit U.S. citizens has disrupted global trade, leading to economic volatility. These measures have sparked retaliatory actions, creating uncertainty in international markets. While the global ramifications of these changes are significant, their impact on Nigeria is particularly concerning, given the country’s heavy reliance on oil exports and agricultural trade.
Tariff Moves and Global Economic Disruption
Trump’s tariff strategy has taken a bold approach, with the latest being a 10% baseline tariff on imports from all countries, along with higher tariffs for nations that have trade surpluses with the U.S., such as China (104%), the EU (20%), and others. African nations, including Nigeria, have also been impacted, with Nigeria facing a 14% tariff.
The newly imposed 14% tariff on Nigerian goods further exacerbates the challenge for the country’s exporters, particularly in the oil and agricultural sectors. These tariffs are part of a broader economic agenda that has already led to significant market volatility, contributing to fears of a global economic slowdown. Oil prices have dropped below $60 per barrel, the lowest in nearly five years, signaling concerns over reduced international trade and slowing economic growth. With oil accounting for over 65% of Nigeria’s exports, this dip in oil prices threatens to undermine the country’s revenue streams and exacerbate the challenges faced by the Nigerian economy. As the global economy slows and demand for crude oil decreases, Nigeria’s oil exports are expected to decline, further straining its foreign exchange reserves.
Impact on Nigeria’s Economic Landscape
The U.S. is a critical trading partner for Nigeria, ranking as the second-largest export destination for Nigerian goods, with oil and agricultural products like cocoa, nuts, and sesame seeds being key exports. However, the imposition of the 14% tariff could diminish Nigeria’s competitive edge in the U.S. market, making these exports less attractive to American consumers. As a result, Nigerian farmers, who rely on export markets to sell their goods, could face reduced incomes, while Nigeria’s broader trade position could weaken.
Further complicating matters, the new tariffs threaten to undermine Nigeria’s benefits under the African Growth and Opportunity Act (AGOA), which has provided duty-free access for Nigerian textiles and agricultural exports. The potential loss of AGOA privileges would further damage Nigeria’s ability to compete in the U.S. market.
The depreciation of the Naira is another significant concern. As oil revenues decline and foreign exchange reserves are strained, the Naira has weakened both in the official and parallel markets. This would increase the cost of imports and drive-up imported inflation. Nigeria’s inflation rate, though slightly reduced to 23.18% in February 2025, may rise again due to higher import costs, putting additional pressure on consumers and further escalating the cost of living.
Strategic Pathways for Nigeria’s Economic Resilience
Given the potential long-term impacts of Trump’s tariffs, Nigeria must adopt strategic measures to protect its economic interests and reduce vulnerability to global trade disruptions.
Firstly, as the U.S. becomes a less viable trading partner, Nigeria must diversify its export markets, focusing on opportunities in Asia, Europe, and within the African Continental Free Trade Area (AfCFTA).
Secondly, the country must strengthen domestic industries to reduce its reliance on imports and provide greater economic stability.
In addition, the Central Bank of Nigeria must take proactive steps to manage the foreign exchange market, implementing interventions to prevent further depreciation of the Naira and stabilizing inflationary pressures.
Conclusion
Trump’s tariff policies have undeniably introduced turbulence into the global trade landscape, and for Nigeria, the effects could be far-reaching. The country’s dependence on oil exports and agricultural products makes it highly vulnerable to shifts in U.S. trade policy, particularly with the imposition of tariffs and the potential loss of AGOA benefits. To navigate these challenges, Nigeria must embrace strategic diversification, invest in domestic manufacturing, and strengthen its fiscal management to cushion the impact of global economic instability.
