The escalating trade tensions under former U.S. President Donald Trump’s tariff policies continue to shake up the global economy, with potential consequences reaching beyond North America and China. While Mexico, Canada, and China remain at the center of this trade dispute, African economies, including Nigeria, could face serious challenges due to their dependence on international trade and investment.
Trump’s administration had prioritized American economic interests, imposing 10% tariffs on Chinese goods, while delaying 25% tariffs on Canadian and Mexican imports. This has sparked retaliatory measures from affected countries, fueling global inflation and disrupting supply chains.
Nigeria and Africa Caught in the Crossfire
According to Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), the tit-for-tat tariff wars between economic superpowers could result in a 6.4% loss in global GDP—equivalent to the combined economies of Japan and South Korea.
“Africa does not want to be caught in this economic battle,” Okonjo-Iweala warned.
With Africa’s trade heavily linked to both the U.S. and China, any decoupling of these economic giants would put countries like Nigeria in a precarious position, affecting trade flows, foreign investment, and economic stability.
Nigeria’s Oil Market Faces Uncertainty
Historically, the United States has been a key buyer of Nigerian crude oil, making trade policies from Washington a critical factor for the country’s economy. However, Trump’s push for energy independence and increased U.S. oil production could result in an oversupply of crude oil, leading to a drop in global prices.
This would have serious implications for Nigeria, where crude oil exports make up a significant portion of national revenue. With the U.S. reducing its reliance on imported fossil fuels, Nigeria may struggle to find alternative buyers, further straining government finances.
Additionally, Trump’s proposal to impose tariffs on oil and gas imports—set to take effect by February 18, 2025—could further shake the energy market, creating additional challenges for Nigeria’s oil-dependent economy.
African Growth and Opportunity Act (AGOA) at Risk
Another major concern is the future of the African Growth and Opportunity Act (AGOA)—a U.S. trade initiative that allows African nations to export over 6,000 products to the U.S. duty-free. Established in 2000, AGOA has been renewed several times, but with Trump’s protectionist stance, there are growing fears that the policy may not be extended beyond its current term.
“Nigeria has not fully taken advantage of AGOA, unlike South Africa, Kenya, and Ghana,” said Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN).
Without AGOA benefits, Nigerian businesses may struggle to access the U.S. market competitively, affecting non-oil exports and manufacturing growth.
Weaker Naira and Declining Remittances
Trade disruptions also pose a risk to Nigeria’s foreign exchange reserves and the value of the naira. If economic tensions slow down growth in North America, it could lead to a decline in remittances from Nigerians living abroad—an essential source of foreign income.
The World Bank reported that remittances from Nigerians overseas hit $20 billion in 2023, making it one of the largest sources of forex earnings for the country. Any decline in these inflows could put additional pressure on the naira, further complicating Nigeria’s economic outlook.
The Road Ahead
As the U.S., Canada, Mexico, and China continue to grapple with trade wars and shifting policies, African economies must brace for potential shocks. Nigeria, in particular, faces three major threats:
✅ Disruptions in the oil market, which could impact national revenue.
✅ Loss of AGOA benefits, affecting trade access to the U.S.
✅ Weaker remittance inflows, leading to forex shortages and currency instability.
To navigate these challenges, Nigeria will need to diversify its economy, strengthen local industries, and expand trade partnerships beyond the U.S. and China. Without strategic planning, the fallout from Trump’s trade war could leave lasting economic scars on Africa’s largest economy.
