The United States is standing at an economic crossroads, with recession fears rising sharply as President Donald Trump doubles down on his aggressive tariff policies. A Deutsche Bank survey now puts the chances of a U.S. economic downturn at 43% over the next 12 months.

As growing trade tensions continue to rattle markets, businesses, and global supply chains, many experts believe the situation is about to worsen.

Far from showing any signs of backing down, Trump is escalating his trade war even further. He has just threatened to impose a 25% tariff on countries purchasing Venezuelan oil, a move that could have significant economic consequences. This latest threat amplifies concerns that his tariff-driven strategy, intended to pressure Venezuelan President Nicolás Maduro, is pushing the U.S. closer to a self-inflicted recession. As global markets react, economists are warning that Trump’s approach is dangerously destabilizing.

Trump has increasingly weaponized tariffs to achieve his administration’s foreign policy and economic goals. From China to Europe, Mexico to Venezuela, he has used the threat of tariffs to force compliance, punish adversaries, and protect domestic industries.

While his supporters argue that these tactics give the U.S. leverage in trade negotiations, economists warn that they could backfire, driving up costs for American consumers and businesses while slowing global economic growth.

As tariffs increase, the risk of stagflation—a scenario where growth slows while inflation remains high—becomes a real possibility. Many economists have long cautioned that Trump’s trade policies could ultimately push the U.S. into recession. His latest Venezuelan oil tariff threat only strengthens that argument.

Can the Fed Prevent a Crisis?

Federal Reserve Chair Jerome Powell has attempted to calm fears, insisting that the economy remains “strong overall.” However, his own forecasts suggest that growth is slowing. After the Fed’s two-day policy meeting last Wednesday, officials lowered their GDP growth estimate for 2025 to just 1.7%, which, excluding the COVID-19 economic collapse, would be the slowest pace since 2011.

At the same time, core inflation is now expected to hit 2.8%, well above the Fed’s 2% target. The risk is that the Fed may struggle to balance economic growth and inflation control, particularly as tariffs drive up costs across industries. While Powell has dismissed comparisons to the stagflation era of the 1980s, some experts believe that the U.S. is moving dangerously close to a similar economic situation, especially if Trump follows through on his escalating trade threats.

“The recent equity market correction was punctuated by the ‘uncertainty shock’ of ever-evolving tariff policy, with investors concerned it could morph into a slowdown or even recession,” Morgan Stanley said in a note on Monday. “What’s really at the heart of the conundrum, however, is that the U.S. might be at risk for a bout of stagflation, where growth slows and inflation remains sticky.”

Powell, however, pushed back against these concerns. “I wouldn’t say we’re in a situation that’s remotely comparable to that is likely,” he said.

Markets and Economists Sound the Alarm

Financial markets have responded with growing anxiety to Trump’s trade policies. Bond market expert Jeffrey Gundlach of DoubleLine Capital recently told CNBC that he sees the chances of a U.S. recession at “50% to 60%.” Barclays analysts noted that “market-based measures are consistent with only a modest slowing in the economy,” though the firm expects a growth rate this year of just 0.7%, barely above the recession threshold.

The UCLA Anderson School of Management, a highly respected economic forecasting center, has issued its first-ever “recession watch” due to Trump’s tariff war. Economist Clement Bohr, from UCLA Anderson, warned that Trump’s actions could directly lead to a downturn. “The downturn could come in a year or two, though it is entirely avoidable should Trump scale back his tariff threats,” he said.

Bohr also issued a stark warning about the dangers of a deeper crisis. “This Watch also serves as a warning to the current administration: be careful what you wish for, because if all your wishes come true, you could very well be the author of a deep recession,” he wrote. “And it may not simply be a standard recession that is being chaperoned into existence, but a stagflation.”

Trump Shows No Signs of Stopping

Despite these warnings, the Trump administration continues to threaten new tariffs, creating greater economic uncertainty. The 25% tariff on Venezuelan oil buyers, if enacted, could trigger a chain reaction of economic consequences. Oil prices could surge, increasing inflationary pressures. Global trade tensions could escalate, harming U.S. exports. Consumer spending could decline, further slowing economic growth. Markets could remain volatile, with investors reacting to unpredictable policy shifts.

With Trump’s trade war showing no sign of de-escalation, the risk of a U.S. recession is growing sharper by the day. If economic data continues to weaken and the administration proceeds with its latest tariff threats, the U.S. economy could be heading into a downturn much sooner than previously expected.

President Donald Trump has launched a new economic offensive, threatening a 25% tariff on countries that purchase oil and gas from Venezuela.

Announcing the policy on his social media platform Truth Social, Trump said the tariffs—set to take effect on April 2—would apply on top of existing trade duties, placing additional pressure on Venezuelan President Nicolás Maduro and his largest buyer, China.

The move underscores the deepening rift between Washington and Caracas, as the Trump administration escalates its long-standing efforts to cripple Venezuela’s oil sector. At the heart of this strategy is a broader goal: curbing China’s growing influence in Latin America.

Venezuela, which exported 660,000 barrels per day (bpd) in 2024, relies heavily on Beijing as its biggest customer, with China purchasing about 270,000 bpd last year. The new tariff measure is widely seen as an attempt to disrupt that flow, forcing countries to reconsider their trade relationships with Venezuela—or face punitive economic consequences from Washington.

“If they buy their oil from Venezuela, they have to pay a 25% tariff to do business with the United States —that’s on top of existing tariffs,” Trump said during a press conference at the White House.

But while Trump portrays the tariffs as a strategic blow to Maduro and China, economists warn that his aggressive trade policies are part of a larger pattern of weaponizing tariffs to achieve political objectives—a tactic that could backfire, destabilizing global markets and dragging the U.S. into recession.

The administration’s reliance on trade restrictions as a tool of foreign policy has already led to economic turmoil in past conflicts, such as the U.S.-China trade war, and experts caution that Trump’s latest escalation could have severe unintended consequences.

Trump’s tariff announcement is designed to tighten the economic noose around Venezuela, which remains heavily dependent on oil exports as its primary source of revenue. The United States itself was the second-largest importer of Venezuelan crude in 2024, bringing in 233,000 bpd, while India and Spain purchased 61,000 bpd and 60,000 bpd, respectively.

Trump is betting that he can further isolate Venezuela and cut off vital funding for its struggling economy by imposing harsh financial penalties on countries that continue trading with Maduro’s regime.

The move is also designed as a direct challenge to China. Beijing has steadily deepened its economic and political ties with Caracas, using Venezuela’s oil as a bargaining chip in its broader geopolitical rivalry with the U.S. Analysts say that Trump’s latest move could increase tensions between the world’s two largest economies, prompting potential retaliatory measures from China that might exacerbate global market instability.

“This announcement by the Trump administration appears to be one more action targeting China,” Matt Smith, an oil analyst at Kpler, told CNBC.

The Deepening U.S.-Venezuela Rift

Trump’s tariff war against Venezuela is just the latest chapter in a deteriorating relationship that has spanned multiple administrations. Since taking office, the president has pursued a hardline approach to Maduro’s government, reinstating crippling oil sanctions that were briefly eased under former President Joe Biden.

Beyond the economic risks, Trump’s tariff war against Venezuela is exacerbating tensions on another front—U.S. immigration policy. The mass deportation of Venezuelan migrants under Trump has drawn intense criticism, with U.S. courts intervening to block some of his most extreme measures.

The tension reached a boiling point on Monday when a federal appeals judge told a Justice Department lawyer that the U.S. treated alleged Nazis better during World War II than the Trump administration treated Venezuelan migrants last week. The judge’s rebuke highlights the widening moral and diplomatic chasm between the two countries, as Trump continues to use both economic and immigration policies as tools to pressure Maduro’s government.

Tariffs as a Weapon—A Strategy That Could Backfire

Economists have warned that Trump’s weaponization of tariffs is a reckless economic strategy that could ultimately backfire on the U.S. Rather than simply punishing Venezuela, the tariffs could trigger a chain reaction of negative economic consequences that include higher oil prices resulting from supply disruptions forcing importers to seek alternative crude sources.

Already, the oil market is reacting. Brent crude futures rose 61 cents (0.85%) to $72.77 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 59 cents (0.86%) to $68.87 per barrel. If prices continue to surge, the cost of gasoline and household energy could rise sharply, undermining Trump’s claims that his economic policies are benefiting American consumers.

Leo Mariani, an analyst at Roth Capital, said Trump’s tariff war risks triggering an inflationary spiral. If oil prices surge beyond a certain point, it could force the Federal Reserve to keep interest rates high for longer, increasing the chances of a U.S. recession.

“We expect oil prices to go higher in light of this news and may rise further if Trump follows through with this proclamation,” He told clients in a note.

Chevron’s Special Treatment Highlights Policy Contradictions

Despite Trump’s aggressive stance against Venezuelan oil, his administration has quietly made an exception for Chevron, the last major U.S. oil company operating in Venezuela. On Monday, the U.S. Treasury Department extended Chevron’s license to operate in the country until May 27, a move that allows the company to continue extracting and exporting crude despite the broader crackdown.

Chevron CEO Mike Wirth personally lobbied top administration officials for the extension, emphasizing the company’s stake in five major oil projects in Venezuela.

Francisco Monaldi, a Latin America energy expert at Rice University, said the whole point of these tariffs was supposedly to cut off Maduro’s oil revenues. But by letting Chevron continue operations, Trump is sending mixed signals—showing that this is as much about controlling global oil flows as it is about punishing Venezuela.

Nigeria’s Dangote Petroleum Refinery is increasingly emerging as a major player in the global energy market, with a report by Reuters indicating a surge in its jet fuel exports to the United States.

According to ship-tracking service Kpler, the refinery has delivered six vessels carrying approximately 1.7 million barrels of jet fuel to U.S. ports in March alone, with another 348,000 barrels expected to arrive at the Everglades terminal by the end of the month.

This uptick in Nigerian jet fuel shipments to the U.S. has led to increased demand for storage tanks in Houston and New York Harbor. TankTiger reported that requests for storage in April have averaged 700,000 barrels—five to six times the usual monthly demand.

The 650,000 barrels-per-day (bpd) refinery, Africa’s largest and one of the top 10 globally, is currently operating at around 85% capacity and aggressively pushing fuel shipments to international markets, particularly North America. With U.S. jet fuel imports rising to their highest level in two years, Dangote’s exports could play a role in stabilizing fuel prices ahead of the peak summer travel season.

The refinery has also capitalized on a maintenance shutdown at Phillips 66’s Bayway refinery in New Jersey, giving it a competitive edge in the U.S. market. However, analysts warn that this window of opportunity may soon close due to high U.S. jet fuel inventories. The Energy Information Administration (EIA) reported that U.S. jet fuel stocks reached 45.2 million barrels at the end of February, the highest level for that month since 1999.

Challenges in the Domestic Market

Despite its increasing influence on the global energy landscape, the Dangote refinery continues to struggle with hurdles in the Nigerian market. One major issue is the continued importation of petroleum products despite the refinery’s vast capacity. The company is currently in a legal battle with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over its continued issuance of import licenses to petrol marketers, a move that Dangote argues undermines local refining efforts.

Securing a steady crude oil supply has also proven difficult. Despite Nigeria’s status as a major oil-producing nation, the Dangote refinery relies heavily on U.S. crude to meet its production needs. The federal government’s Naira-for-Crude arrangement, which was meant to support local refineries by allowing them to purchase crude oil in Naira, has ended after a period of inconsistency.

With the cancellation of the Naira-for-Crude deal, it is expected that the Dangote refinery will further shift its focus to the international market, prioritizing exports over domestic sales. This move could enhance the refinery’s profitability but also come with consequences for Nigeria’s domestic fuel market.

The refinery had previously been selling products to local marketers at a lower rate, helping to stabilize prices. However, analysts warn that without the Naira-for-Crude framework, petrol prices in Nigeria are likely to rise, putting additional pressure on consumers who are already grappling with economic hardship.

As a result, the refinery has stopped selling petroleum products to Nigerian marketers in Naira, citing an imbalance between its sales revenue and crude oil purchase obligations.

“Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars,” the company said in a statement earlier this month.

This decision could further strain Nigeria’s foreign exchange reserves and lead to higher petroleum product prices in the domestic market, analysts warn.

The Dangote refinery’s ability to compete internationally highlights its potential as a major global refining hub. However, without significant policy reforms and structural changes in Nigeria’s downstream oil sector, the company’s struggles at home may continue to hinder its full economic impact within the country.

Tesla’s sales in Europe plummeted 44% last month, marking one of the most significant declines for the Texas-based electric vehicle (EV) maker in recent years. The drop, recorded across 25 European countries—including the UK, Norway, and Switzerland—comes amid growing concerns among shareholders that Elon Musk’s controversial political interventions are turning off potential buyers.

According to Jato Dynamics, Tesla sold less than 16,000 vehicles in the region in February, its lowest market share (9.6%) for the month in five years. This follows an even sharper 45% decline in January, where sales dropped from 18,161 units in 2024 to 9,945 this year.

Musk’s increasingly visible role in Donald Trump’s administration, coupled with his vocal support for Germany’s far-right AfD party and public political stunts—such as brandishing a chainsaw at a conservative conference—have fueled concern that Tesla is facing a growing consumer backlash. Protests targeting Tesla dealerships have also emerged, further complicating the company’s European sales outlook.

Despite Tesla’s struggles elsewhere, the UK market proved to be an exception. The Society of Motor Manufacturers and Traders (SMMT) reported a 21% rise in new Tesla car registrations in February, with the Model 3 and Model Y ranking as the second and third best-selling cars in the country, behind the Mini Cooper. However, Tesla’s recent success in the UK does not necessarily counter the broader trend of declining European sales. Analysts argue that the UK’s EV incentives, fleet sales, and Tesla’s ongoing price cuts may have artificially buoyed demand in the short term.

Competitors Are Gaining Ground

Tesla’s sales slump comes as European and Chinese automakers rapidly gain ground. Volkswagen reported a 180% surge in battery electric vehicle (BEV) sales, reaching nearly 20,000 units in February. BMW and Mini combined to sell 19,000 BEVs, closing in on Tesla’s total, while Polestar recorded an 84% increase, delivering over 2,000 vehicles. BYD, the Chinese EV giant, saw a 94% sales increase in Europe, surpassing the 4,000-vehicle mark for the month.

BYD’s financial strength further underscores its growing dominance in the EV sector. The company reported record-breaking annual revenue of 777 billion yuan ($107 billion) for 2024, a figure that eclipsed Tesla’s $97.7 billion revenue from the previous year. In its earnings report released on Monday, BYD disclosed a net profit surge of 34% year-over-year to just over 40 billion yuan ($5.55 billion). This exceeded analysts’ expectations of $5.44 billion but remained below Tesla’s $7.1 billion net profit for 2024.

BYD now sells nearly as many electric vehicles as Tesla, with 1.76 million units sold last year compared to Tesla’s 1.79 million. When including hybrid sales, BYD is significantly larger, delivering 4.27 million vehicles in 2024—almost matching Ford’s 4.5 million global sales.

Musk’s Politics Hurts Tesla in Europe

Elon Musk’s political affiliations and increasingly divisive public persona are impacting Tesla’s brand perception, particularly in progressive-leaning markets like Germany, France, and Scandinavia. His endorsement of Germany’s far-right AfD party, repeated criticisms of European leaders, and provocative social media posts have alienated a portion of Tesla’s historically liberal customer base.

Some Tesla owners have reportedly sold their cars in protest, while prospective buyers explore alternatives from legacy European automakers or Chinese brands.

However, analysts believe that Tesla’s slump can’t be solely attributed to Musk’s politics. They argue that multiple business factors may be contributing to the decline, including the transition of Tesla’s bestselling Model Y to an updated version, disruptions in government EV incentives in key markets, and rising competition.

Felipe Muñoz, a global analyst at Jato Dynamics, noted that Tesla is experiencing a period of immense change. In addition to Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version of the Model Y before it rolls out the update.

“Tesla is experiencing a period of immense change. In addition to Elon Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version of the Model Y – its bestselling vehicle – before it rolls out the update,” he said.

“Brands like Tesla, which have a relatively limited model lineup, are particularly vulnerable to registration declines when undertaking a model changeover.”

Tesla’s European decline comes amid wider shifts in the global EV market, with Chinese automakers expanding aggressively and legacy carmakers ramping up their electric vehicle production. BYD, which has already surpassed Tesla in global revenue, has set ambitious targets, forecasting between 5 million and 6 million vehicle sales in 2025. Meanwhile, Volkswagen and BMW continue to increase their BEV production, further eroding Tesla’s early-mover advantage.

The total number of BEV registrations across Europe rose by 25% in February, highlighting that while Tesla’s sales are shrinking, the overall EV market continues to grow. This underscores a fundamental shift in consumer preference—one that no longer revolves solely around Tesla.

Tesla remains a dominant force in the global EV market, but its diminishing influence in Europe raises questions about whether it can sustain long-term growth in an increasingly competitive landscape.

While Musk’s political controversies may be alienating some buyers, the company’s challenges in Europe are also tied to market forces beyond his personal brand. With Tesla’s rivals gaining momentum, analysts believe the company will need to rethink its European strategy, whether through price cuts, new models, or an aggressive marketing push to regain lost ground.