The Trump Trade War

AACS Fortnightly

(Mondays)

10th March 2025

Remember to tell them you saw the brand on Nigerian Panorama

From The Chairman’s Desk

In our AACS’ Fortnightly edition of February 10, 2025, titled America First, Trade Protectionism and the Global South ( bit.ly/4ixtAbE & bit.ly/3F7k0Oo ) . We reiterated the illogicality of the punitive tariff policies of the new US government and why they would not only be disruptive but also could not help the American economy.

Donald Trump’s tariff policies have been a subject of controversy and uncertainty, particularly with regard to Canada, Mexico, and China. Between January 20, 2024, and March 6, 2024, the tariffs imposed on these countries have been paused, reversed, and re-imposed multiple times, causing significant market disruptions and making business decisions unstable.

The US government has recently made several changes to its tariff policies. Late last week, the implementation of tariffs was paused, extended, and then reversed, all within a span of seven days. The US had imposed a 25% tariff on Mexican imports and a 10% tariff on Canadian oil and gas, which were later delayed for a month and eventually went into force on Tuesday, March 4, but are being reviewed in bits.

These policy reversals have naturally bred unpredictability and instability, sending the markets into a tailspin, recovery, and confusion. Predictability and stability are essential elements of business and economy, and the world must start to learn how to predict unpredictability to stay afloat.

Closer to home, in Nigeria, the effects are huge. The oil market price for the Brent benchmark, which was set at $75 in the budget, has dropped by $8 to $67 per barrel in the last week due to declining demand and the possibility of a glut arising from OPEC being pushed to increase production.

This trade war will serve no nation but will punish all, and no one knows the endgame. The reason given by the US government is to stop the export of the dangerous drug Fentanyl into the country and also redress its trade imbalances. However, the policy will greatly hurt the global economy (including the US) if it is not stopped. AACS would like to see some anticipation from Nigerian economic managers now because we run the big risk of further deficits in the 2025 appropriation bill.