Donald Trump has refused to rule out the possibility of a U.S. recession this year as tariffs imposed on trade partners create economic uncertainty.

The president admitted on Sunday that there would be a transition period and that his policies would take time to show results. When asked about a potential recession, Trump said: “I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”

The president downplayed market volatility, despite having imposed tariffs on Canada, Mexico, and China.

Meanwhile, Commerce Secretary Howard Lutnick acknowledged that the prices of some goods could rise in the coming weeks.

A recession in the United States has a ripple effect on global economies, including Nigeria. As Africa’s largest economy, Nigeria maintains strong trade, investment, and financial ties with the US. When the American economy slows down, it directly impacts Nigeria’s GDP, currency value, foreign investments, and job market.

few ways a US recession can directly affect Nigeria’s economic situation.

1. Decline in Foreign Direct Investment (FDI)
   During a recession, US investors become more risk-averse, leading to a reduction in Foreign Direct Investment (FDI) in developing economies like Nigeria. This slowdown affects sectors like real estate, banking, oil & gas, and manufacturing, leading to fewer job opportunities and stalled economic growth.

Impact on Nigeria:

Reduced funding for infrastructure projects
Fewer job opportunities in US-funded companies
Slower expansion of tech and startup ecosystem

2. Drop in Oil Prices
   Nigeria heavily relies on oil exports, with crude oil contributing over 90% of its foreign exchange earnings. A US recession typically leads to lower global demand for oil, causing a decline in crude prices. This weakens Nigeria’s revenue base, affecting budget allocations and public spending.
   What This Means:

Lower government revenue and potential salary delays
Increased pressure on forex reserves
Possible fuel price fluctuations

3. Depreciation of the Naira
   A US recession can lead to a strengthened US dollar, causing the Nigerian naira to depreciate. Since Nigeria imports a large portion of its goods in US dollars, a weaker naira leads to higher import costs, increased inflation, and reduced purchasing power.

Effects on Consumers:

Higher costs of imported goods (electronics, machinery, clothing)
Increased inflation leading to economic hardship
Rising cost of living