Author: Ibukun-Oluwa Addy

It’s not all bad news. Barely a week ago on April 30^th 2025, Nigeria was reported to have paid of it’s principal debt to the International Monetary Fund (IMF). We are technically debt free. The future looks bright, but other issues still concern the country, and one of them is the global tariff crisis.

In the first week of April, The U.S.A Made an interesting decision to place a tariff on products coming from Nigeria into the U.S.A. The basic implication of this is that, business and individuals that want to import goods from Nigeria will pay an extra amount of money — equivalent to 14% percent of the total cost of the item.

What Caused the Crisis?

If it were as simple as running home to tell our parents who started the fight in the school yard, we would have to say Nigeria. Yes, Nigeria threw the first proverbial stone, after it placed restrictions and bans on beef, pork, poultry, fruit juices, medicaments and spirits coming from the U.S.A.

This stone throwing is not unjustified or unprovoked though, as it follows a growing global trend of countries pining for self-sufficiency and circular economies. Independent, self-sustaining nations are a concept as old as time, but things are being put into motion faster than ever before.

Why Exactly did Nigeria place a ban?

So why did Nigeria place a ban on U.S.A goods? Well, the Nigeria custom service placed a ban on importation of 25 different products, ranging from bird eggs, cocoa butter, powder, cakes, pork, beef, live bird, dead birds (let’s hope they mean processed chicken), refined vegetable oil and fats.

Yes, these are useful goods, however I would assume that the average Nigerian has local alternatives to cocoa butter, pork, beef and cakes. I’m sure most Nigerians, have treaded carefully, at least once, beside a massive heard of cows.

What effects do these tariffs have?

Here’s a simple analogy: Imagine, (emphasis on imagine), if 1 ton of Maize costs 500,000 naira — U.S.A importers will end up paying 570,000 naira instead. Obviously, this is discouraging to importers, and in response, exporters are usually forced to bring the prices of goods down by an equivalent percentage.

To prevent importers from running away, the price of maize being exported could come down to 430,000 naira per ton, meaning the exporter suffers all the consequences.

In better cases, the importer and exporter split the burden. Our maize seller absorbs half of the Tarif which is 7%, and the importer only pays 7%. Just to be clear, this means the extra 70,000 naira on top gets split. The importer pays 35k, the exporter pays 35k; it’s an equal loss, so to speak.

Unfortunately, importer’s splitting tariffs (or paying them all together) is heavily dependent on how much people demand a product, and its alternatives. If the price of a random air freshener you use, suddenly goes up by 1000 naira, won’t you look for a cheaper alternative? Now, if the price of rice goes up by 5000 naira a bag, chances are you’ll definitely find a way to keep buying rice — reduced quantity or not.

Unfortunately, tariffs go beyond the targeted products and often cause ripple effects. One product often serves as a component or raw material of another. If eggs or flour became expensive, so does bread. I hope I don’t have to explain why.

I will be generous enough to explain why an increase in eggs would create an increase in the price of software. You see, if the cost of food goes up, salaries need to be increased, tech businesses need to increase revenue, and of course, increasing prices is often the first way to increase revenue.

Are Nigerian Agricultural Products Important to the U.S.A?

Now here’s the big question…are Nigerian Exports all that important to the U.S.A? Well, the ban was on agriculture, pharmaceuticals, beverages and consumer goods. Fortunately, the ban does not include oil and gas, which is 90% of Nigeria’s total global export. However, many people argue that a ban or tariff on oil is another doomsday lurking in the shadows.

In 2024, the United States imported from Nigeria, roughly 115 million dollars’ worth of food and agricultural products. Do what you may with that figure. I’d argue that agricultural produce, and pharmaceutical goods are rather essential. You could find someone who doesn’t eat, fall sick or bathe to argue otherwise, but that’s beside the point.

The point is there will not be earth shattering chaos in the U.S.A, if agricultural food from Nigeria is expunged from the U.S.A. Certain businesses would be affected, but the U.S.A could always import from another country. It is Nigeria that feels, and will continue to feel the pinch.

So, while Nigeria might not be scoring enough points in this skin pinching competition, one country appears to have proven indescribably useful to the U.S.A. The U.S.A is of course pushing back. You probably guessed it; the country is China.

Since Trump assumed office, tariffs on products coming to the U.S.A from China have skyrocketed from 10% to 245%. This is an attempt to reduce their dependency on imports from China.

In 2024, the US imported$438.9 billionworth of goods from China, while US exports to China were $143.5 billion. That is a huge gap, not a balanced country to country trade. As the youth would say “It’s giving dependency”.

Will Nigeria Cease to Exist Because of Trump’s Tariff?

Since the tariff is yet to affect oil, the answer is no. Nigeria will not cease to exist because of Trump’s tariff. Many businesses would definitely be affected, but they might direct their exports elsewhere, as advised by the Nigerian Economic Summit Group (NESG). Nigeria is also reported to have paid of most of its IMF debt, hence it’s in a better position to compete globally. We should prepare for all the attention that comes with that.

Recap

Markets in economics are like a chain fence that are occasionally electrified, running for kilometers in expensive neighborhoods or crime plagued ones. Everyone flees from them, until someone discovers by sheer accident or attempted suicide, that the fence does not electrocute people at all. Soon enough, everyone is plucking at it, selling it as scrap metal, or sitting on it — until one day, the property owners increase the voltage again.

We are in an age, where countries are realizing the dangers of mono-economies and globalization. Every nation is trying to create a self-sustaining economy. For context, mono economies are economies manufacturing or supplying just one product or raw material. If asbestos is no longer in demand globally, a nation which has this as its primary export, suffers.

This is why nations are trying to diversify what they manufacture, and create a circular economy where they consume most of what they produce. The problem is everyone wants to maintain exports, while reducing imports.

Many things are uncertain, but the laws of economics are sure. Price changes have an effect on human behavior. Perhaps the U.S.A will frantically start establishing factories, perhaps poverty is knocking for all countries. The truth is, the road to a self-sustained country, for Nigeria, China or the U.S.A —requires incredible resilience.