On April 9, 2025—what President Donald Trump has now dubbed “Liberation Day”—the United States will begin imposing a sweeping 14% tariff on all imports, part of a dramatic pivot in America’s global trade policy.
Framed as an effort to “liberate American jobs” and reduce reliance on foreign goods, the announcement is already rattling economies worldwide.
However, for countries like Nigeria, the impact could be especially brutal.
While the policy may be aimed at China and other major exporters, Nigeria is caught in the crossfire. Though not among America’s largest trading partners, Nigeria sends about $10 billion worth of goods to the U.S. annually— 80% of that is crude oil.
Now, with U.S. buyers expected to pay an extra 14% on those imports, Nigerian oil suddenly looks a lot less competitive. The ripple effects could deal a blow to Nigeria’s economy, which is already weighed down by soaring inflation, high unemployment, and a currency in decline.
To understand what’s at stake, it helps to break this down.
A tariff is essentially a tax imposed on goods entering a country. With this new 14% tariff, every $100 worth of Nigerian oil will now cost U.S. refiners $114. For Nigeria, this doesn’t just raise questions about trade, it raises alarm bells about revenue, inflation, and overall economic stability.
The first area of concern is oil exports. Nigeria’s most valuable export product is crude oil, and the U.S. remains one of its key buyers. With the added cost, American importers could turn to cheaper alternatives from the Middle East or Latin America.
Even a modest drop in demand—say, 14%—would cost Nigeria about $1.12 billion annually. That kind of revenue loss is not abstract; it’s equivalent to 10% of the country’s entire health budget for 2024. Worse still, if Nigerian oil becomes permanently unattractive to U.S. refiners, the country could lose that market entirely, forcing it to find new buyers—likely at reduced prices.
Imports are another area where Nigeria could feel the heat. The country brings in about $5 billion worth of goods from the U.S., including wheat for bread and industrial machinery. Although Trump’s tariff targets exports to the U.S., it could provoke retaliation.
If Nigeria decides to slap its own tariffs on American imports, particularly wheat, food prices could spike. A 14% increase in the cost of U.S. wheat, for example, could raise the price of bread by up to 15%. In a country where over 60% of households already struggle to afford regular meals, even a slight increase could deepen food insecurity.
The impact won’t stop at bread. Should tensions escalate, imported items like vehicles, phones, and electronics—already expensive at an exchange rate of N1,600 to the dollar—could see price hikes of 20% to 30%, squeezing consumers and businesses alike.
Then there’s the revenue shock to the Nigerian government. Oil revenues account for about 60% of federal earnings, funding everything from education and healthcare to roads and power.
A drop of over $1 billion in oil revenue would punch a hole in the budget. At current exchange rates, that’s about N1.79 trillion, enough to build 200 new schools or vaccinate five million children. And that might just be the beginning.
If Nigeria can’t find alternative buyers quickly, excess supply could push global oil prices down by $1 to $2 per barrel, leading to further losses.
And of course, all this plays directly into Nigeria’s currency troubles. The naira is already under pressure, trading around N1,545 to the dollar. A loss of $1.4 billion in export revenue would further deplete the country’s dollar reserves, causing the naira to depreciate even more.
Some analysts warn that the currency could slide toward N2,000 to the dollar if nothing is done. That would raise the cost of virtually every imported item—fuel, food, medicine—and worsen the inflation crisis, which already stands at a staggering 34%.
A loaf of bread that costs N500 today could easily jump to N600 or more. For the estimated 25 million unemployed Nigerians, that’s a nightmare scenario.
But it’s not all doom and gloom. Nigeria still has a few strategic options. One path forward is to deepen trade ties with China and India, which already buy significant volumes of Nigerian crude. Another is to lean into regional trade by leveraging the African Continental Free Trade Area (AfCFTA), opening new markets across the continent.
Nigeria could also take this moment to invest in local production—growing its wheat, reviving domestic manufacturing, and reducing dependence on imports. On the currency front, striking bilateral trade deals that allow transactions in local currencies—with countries like Russia, Brazil, or even India—could help reduce demand for the dollar and ease pressure on the naira.
Trump’s “Liberation Day” may have been designed to protect American workers, but the fallout will be global. For Nigeria, it is both a challenge and a turning point. A challenge, because the immediate losses in revenue and currency stability could be steep.
But also a turning point, because this could be the moment Nigeria is forced to rethink its economic structure—away from overdependence on crude oil and toward a more diversified, self-sustaining model.
Whether Nigeria seizes this moment or stumbles under its weight may determine the direction of its economy for years to come.
This article was sent in by Abraham Durosanwo, a financial & capital market analyst based in Abuja.
