Nigeria may be impacted negatively by the new trade policy of the United States and other global trade tensions except it takes some urgent strategic and structural policy decisions.
This was according to a new report by PwC, a global professional services firm, in its report titled ‘Global economic policy changes and implications for Nigeria: Key considerations and outlook, released on Monday.
The report said global policies may potentially impact Nigeria in four key areas, including reduced trade flows, a drop in Nigeria’s foreign exchange inflows, a hike in the cost of imported goods, and a drop in remittance inflows, and generally exacerbating the inflation and foreign exchange crisis in the country.
On April 2, 2025, the United States announced a new set of tariffs known as the “Liberation Day Tariffs.” The measures were designed to reshape trade policy through reciprocal actions aimed at addressing the U.S. trade deficit.
A baseline tariff of 10 per cent was introduced on all imports, with higher rates applied to countries that run significant trade surpluses with the United States.
Based on the new policy, the U.S. imposed reciprocal tariffs of 14 per cent on Nigeria, 30 per cent on South Africa, 21 per cent on Namibia, 50 per cent on Lesotho, and 10 per cent each on Kenya, Ghana, and Ethiopia.
This new policy by the United States has sparked a trade war across the globe as different countries begin to announce their own hikes in tariffs on goods entering their countries, thus creating a global economic uncertainty.
Nigeria’s trade balance with the U.S. improved from a deficit of $236.2 billion in January 2024 to a deficit of $143 billion in January 2025. Nigeria’s trade deficit may worsen amid a potential U.S. domestic energy increase and decline in global oil prices.
According to the report, Nigeria exported oil and non-oil products worth ₦5.5 trillion to the U.S. in 2024.
“Lower demand for oil and non-oil exports leads to lower foreign exchange inflows, affecting the naira’s stability and reducing GDP growth,” it said.
The report also said Nigeria exported $1.76 billion worth of goods to the U.S. in 2024 under AGOA preferences. It noted that reduced U.S. demand for oil and the potential loss of AGOA benefits may hurt Nigeria’s trade surplus.
“Declining foreign exchange inflows weaken the naira, increasing import costs, hike in inflation and interest rates,” the report noted.
It also said that U.S. tariffs on China and broader trade disruptions may raise the cost of imported goods (such as machinery and raw materials), which would affect Nigerian businesses and lead to higher inflation.
To mitigate the raging global economic crisis, the report said the Nigerian government must take some strategic and structural policy decisions.
Other recommendations by the report include strengthening partnership with the U.S, expanding alliances beyond the U.S, boosting non-oil exports and domestic production, mobilising long-term infrastructure financing, and strengthening infrastructure investment.
