Trump effect: How tariffs, trade wars will affect global property market

…Nigerian market not insulated from impact—Analysts

Since the return of Donald Trump to the White House at Pennsylvania Avenue in Washington, the world economy has not remained the same, no thanks to the real estate guru’s protectionist economic policies.

Trump’s sweeping tariffs on major export commodities to his country have pitched him against the rest of the world and this is creating trade wars that are impacting international trade and world economy at large.

Specifically, Trump’s over-dose tariffs on America’s three most important trading partners— Canada, Mexico, and China are regarded as the Bull in a China Shop.

In March 2025, Trump’s administration imposed tariffs on imports from these countries, (10 percent on Canadian energy) and doubled the tariff on Chinese goods from 10 percent to 20 percent. The three countries swiftly retaliated, precipitating what is today a global trade tension.

These tariffs and the trade tensions are also creating upsets in the economies of some countries of the world, including Nigeria. Though the impact is not being felt at the moment, analysts are of the view that the country is not totally insulated from the overall effect.

Bismarck Rewane, CEO, Financial Derivatives Company, says the tension in the global economy will affect Nigeria in many ways. “Rising global commodity prices pose upside risk to inflation,” he noted in his monthly economic review in March, 2025.

He added that investors may delay commitments due to global economic uncertainties and interest rate shifts; higher global interest rates could increase Nigeria’s external debt burden while global demand slowdown could weigh on Nigeria’s non-oil exports, especially agriculture and manufacturing.

“Global economic trends impact remittances, a key source of forex for Nigeria; Nigerian stock and bond markets face contagion risk from the global financial markets; fluctuating global oil prices could impact Nigeria’s foreign earnings and fiscal stability, and government revenue may fall short, straining budgets and public spending,” Rewane stated.

Real estate analysts posit that these impacts have potential shocks for the sector, especially as over 70 percent of building materials used in Nigeria are imported mostly from China which is in the eye of the storm.

They pointed out that remittances are one area that the local real estate market would be affected significantly. Kunle Adeyemi, CEO, Sterling Homes, told to BusinessDay that over 30 percent of market transactions is driven by the activities of Diaspora investors.

“Remittances from these Diaspora Nigerian investors have been a major driver of our market. Many of us developers have them as our target market and their patronage has been quite comforting,” Adeyemi, who is also the South West Zonal Chairman of Real Estate Developers Association of Nigeria (REDAN), said.

At global level, higher material costs may drive up prices and this is to be expected with Trump’s 25 percent tariffs on all steel and aluminium entering the US, with ‘no exemptions, and no exceptions.’ His tariffs on Mexico and Canada are also set to hit softwood lumber and concrete – two key homebuilding materials.

Read also: Resist land offers in Festac Town, FHA warns buyers

The construction industry is highly sensitive to material costs, and tariffs could significantly impact building expenses. This may lead to increased costs for residential and commercial developments, potentially reducing new construction activity.

Another area of impact is in monetary policy divergence which could influence activity. Analysts reason that the impact of tariffs on inflation and economic activity could lead to diverging monetary policy approaches among the world’s central banks. This, in turn, could affect financing.

They see Trump’s tariffs driving up inflation in the US, potentially forcing the Federal Reserve to maintain higher interest rates which will make mortgages and real estate financing more expensive, possibly dampening housing market activity and reducing affordability for buyers.

According to the analysts, there is uncertainty ahead, explaining that as global trade tensions escalate, the real estate market faces a period of heightened uncertainty.

“Investors and developers must navigate shifting demand dynamics, rising construction costs, divergent monetary policies, and currency fluctuations. While some markets may benefit from the evolving landscape, others could see slower growth or increased volatility.

For those looking to invest in property, understanding these macroeconomic trends will be critical. Whether adapting to rising material costs, seeking opportunities in stable markets, or leveraging FX movements, strategic decision-making will be key in an era of trade wars and economic realignment,” the analysts advise.