Impact of U.S. Tariff Hike on Nigeria’s Auto Market Growth Prospects

Nigeria’s auto market, heavily reliant on U.S. used car imports, faces further challenges with an impending 25% tariff imposed by the U.S. This tariff is expected to exacerbate inflation and increase vehicle prices, which have already risen dramatically over the past two years. Importers and consumers express serious concerns about affordability, highlighting the necessity for deeper structural changes within Nigeria’s automotive industry to ensure sustainability and growth.

David Tope, a notable automotive importer in Nigeria, has faced increasing challenges in the auto market. Previously, he imported up to five vehicles weekly from the United States and Canada, but import costs have skyrocketed since 2023 due to currency depreciation and heightened duties. He ceased his import activities by early 2025, citing significant inflation in duties and the devaluation of the naira affecting the importation process.
Tope stated, “It’s not just the country that’s the thing, but our inflation rate is so high on duties and the naira devaluation — so it’s affecting importing from any country at all. It’s not just for the car to be cheap, but also for our custom duties to be reconsidered so that the normal man can at least survive this business of car dealership.”
Tope is contemplating his future plans as the United States prepares to implement a 25% tariff on vehicle imports starting in April. While this tariff primarily targets vehicles entering the U.S., it is expected to indirectly affect Nigeria’s auto market, which relies heavily on imports of American used cars. Tope expressed concern about the implications of increased tariffs, indicating that rising production costs in the U.S. would heighten vehicle prices in Nigeria.
He remarked, “U.S. is the main market of importation that we do, so if inflation rate of 25% is being put on their cars, it’s going to affect Nigeria market. If the cars are being produced in U.S., it is going to be cheaper for us. But if the cars are being imported to U.S, then exported to us, the inflation rate will be unbearable for car dealers like me.”
The impact of the tariff extends beyond importers; it has influenced consumer prices, with vehicle costs in Nigeria increasing by nearly 400% over the past two years. Consumers such as Emmanuel Aaron and Akintunde Akinmolaye have expressed concerns about the escalating costs of vehicles. Aaron stated, “Honestly, the cost has gone so, so high that my interest in buying cars has to be suspended.”
Akinmolaye added, “We know that U.S. cars are built with quality, care and comfort compared to other places, but in terms of cost now, cost may make one jettison all those preferences.”
Economist Hauwa Mustapha asserts that the pending 25% tariff could significantly transform Nigeria’s auto market. If the U.S. emphasizes local vehicle production, fewer used cars may be available for export, further inflating prices in Nigeria. She emphasized the need for systemic improvements to local manufacturing, which currently produces only about 14,000 vehicles annually, a fraction of the market demand.
Mustapha advocated for strengthening Nigeria’s steel industry and improving supportive infrastructure, stating that it would enhance the production capacity of local assembly operations. As the situation evolves, Nigerian importers like Tope are observing developments closely, uncertain of their next steps.

The impending U.S. tariff on vehicle imports complicates Nigeria’s already struggling auto market, characterized by skyrocketing prices and inflation. Importers like David Tope are significantly affected and confront daunting challenges as they rely on U.S. used car exports. Economists suggest that strengthening local manufacturing and infrastructure is vital for the long-term sustainability of Nigeria’s auto industry. Without proactive measures, the livelihoods of many individuals in the automotive sector are at significant risk.

Original Source: www.voanews.com