Trump agreed to pause anticipated tariffs on Mexico for one month, how tariff could affect Nigeria

President Trump says he agreed to “immediately pause” tariffs on Mexico for a month after a “very friendly” conversation with the country’s president Claudia Sheinbaum. If Trump decides to impose tariff on Nigeria, The potential upward adjustment of tariffs on U.S. goods could have a ripple effect on Nigeria’s inflation outlook for 2025. One of the most immediate areas of concern is the rising cost of imported used cars, commonly referred to as “Tokunbo” vehicles in Nigeria. Nigeria relies heavily on the U.S. for its used car imports, which were valued at N1.47 trillion in 2023. As of September 2024, imports stood at N892 billion. With used cars already beyond the financial reach of most Nigerians, many first-time buyers are now opting for locally used vehicles instead.
If higher tariffs make U.S. car exports more expensive, it could further raise the cost of acquiring a vehicle in Nigeria. This would, in turn, affect transport costs, a major contributor to inflation. Transport inflation currently accounts for 10.7% of the total Consumer Price Index (CPI). A rise in car prices, coupled with higher fuel costs, would increase the cost of public transportation, logistics, and general goods and services. Additionally, petroleum-based products such as gas oil, motor spirit, and lubricating oils—are also major imports from the U.S. If tariffs increase their costs, Nigeria could face higher fuel prices, compounding existing inflationary pressures driven by exchange rate fluctuations and global crude oil price dynamics. One major development that could help cushion Nigeria from the impact of rising fuel costs is the increased local refining capacity, particularly with the commencement of operations at the Dangote Refinery.
The refinery, Africa’s largest, has the capacity to refine 650,000 barrels of crude oil per day, significantly reducing Nigeria’s reliance on imported petroleum products. This could help offset potential price hikes on fuel imports from the U.S. by increasing domestic supply, stabilizing fuel prices, and reducing Nigeria’s vulnerability to external trade disruptions. With more refined products being produced locally, Nigeria can cut down on its imports of petroleum products, a key category of U.S. exports to Nigeria. This shift could not only save foreign exchange but also mitigate the inflationary impact of For Nigeria, these tariffs could impact key imports from the United States, exacerbating inflationary pressures. According to data from the National Bureau of Statistics (NBS), Nigeria’s major imports from the U.S. include: Gas oil, Motorcycles and cycles fitted with auxiliary motors, Petrol fuel, Other medicaments not elsewhere specified, Other static converters not specified, Penicillins or derivatives thereof, Butanes, Used vehicles with diesel or semi-diesel engines (cylinder capacity > 2500cc), Motor spirit, Ethyl alcohol and other spirits, denatured, of any strength
Trump said “I just spoke with President Claudia Sheinbaum of Mexico. It was a very friendly conversation wherein she agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States,” Trump wrote on Truth Social. These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our Country,” he wrote. We further agreed to immediately pause the anticipated tariffs for a one month period during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico.
“I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a “deal” between our two Countries,” the president went on. The 25% tariffs on Mexico had been set to take effect at midnight. Sheinbaum also posted on social media about the pause, saying she and Trump had reached agreements on security and trade. Mexico will immediately reinforce the border with 10,000 members of its National Guard, while the US committed to working on preventing high-powered weapons from being trafficked to Mexico, Sheinbaum said.