An economist, Samuel Caulcrick, said the suspended 15 per cent tariff on imported fuel would have triggered trade wars between Nigeria and other countries.

He also said that the tariff imposition, if implemented, would have also increased the cost of living for Nigerians.

Speaking with The Guardian in Lagos, Caulcrick declared that while tariffs are often introduced to encourage local manufacturing under the import substitution industrialisation (ISI) model, they could also produce significant negative effects if not properly implemented.

He feared that higher import tariffs could lead to increased consumer prices, reduced innovation, limited product choices and the potential for retaliatory trade measures from Nigeria’s trading partners.

The Federal Government, yesterday, suspended the proposed 15 per cent tariff on imported fuel.

Citing a 2019 study on the United States (U.S.) tariffs, which showed that American households paid an additional $3,300 yearly due to tariff-induced price increases, Caulcrick said Nigeria could face similar inflationary pressures if it failed to balance protectionism with global competitiveness.

He noted that protecting “infant industries” without a clear path towards competitiveness could make them complacent and inefficient, trapping the economy in a cycle of dependence on government protection.

He urged the Federal Government to draw lessons from China’s industrial growth model, which he said combined protectionist measures with foreign investment incentives, export-oriented policies, and technological development, not tariffs alone.

He added, “Tariffs are ultimately paid by domestic consumers and businesses. They face higher prices for imported goods and even for locally produced alternatives that no longer have to compete on price.

“China’s economic rise was not built solely on import restrictions. It actively attracted foreign direct investment, built strong supply chains, and created an export-led manufacturing system that guaranteed global competitiveness.”

He also cautioned that Nigeria’s tariff policy should not mirror Donald Trump’s style of trade war tactics, which led to global retaliatory tariffs and disrupted supply chains in the United States.

Instead of relying solely on import tariffs, Caulcrick proposed an alternative consumer credit scheme that would encourage Nigerians to buy locally made products without unduly increasing living costs.

For instance, he opined that a consumer credit scheme that could only be used to purchase local goods would be more innovative and less harmful to the economy.

He, however, commended President Bola Tinubu for suspending the 15 per cent import policy on Premium Motor Spirit (PMS) and diesel.

The approval had stirred widespread concern across the oil and gas sector, with operators warning it could raise petrol prices, worsen inflation and increase import costs, even as the government insists the policy aimed to boost local refining and generate revenue.

Tinubu’s approval was conveyed in a letter signed by his Private Secretary, Damilotun Aderemi, following a proposal submitted by the Executive Chairman of the Federal Inland Revenue Service, Zacch Adedeji.

The proposal sought the application of a 15 per cent duty on the cost, insurance, and freight value of imported petrol and diesel to align import costs with domestic market realities.