The likelihood of the United States slipping into a recession in 2025 has surged as President Donald Trump intensifies his tariff war, using trade restrictions as a key bargaining tool in international negotiations.

According to Alec Kersman, managing director and head of Asia-Pacific at Pimco, the probability of a U.S. recession this year has jumped to 35%, up from just 15% in December 2024. Speaking at CNBC’s CONVERGE LIVE event in Singapore, Kersman attributed the heightened risk to the economic ripple effects of Trump’s tariff policies and the retaliatory measures taken by key U.S. trading partners.

Despite this, Trump remains adamant that tariffs are necessary to protect American industries, even as analysts warn that prolonged trade disputes could push the U.S. economy into a downturn.

Economic Growth Expected to Slow, but Not Collapse

While recession fears have intensified, Kersman emphasized that Pimco’s base case scenario still predicts U.S. economic growth of 1% to 1.5% in 2025. This marks a significant slowdown but stops short of a complete contraction.

“It’s quite a significant decrease,” Kersman noted, pointing to the impact of tariffs on global trade flows.

Some analysts, however, argue that domestic consumption could help offset some of the economic slowdown. Kamal Bhatia, president and CEO of Principal Asset Management, said that nationalistic spending patterns triggered by tariffs could encourage more Americans to buy domestically produced goods, boosting internal economic activity.

Tariffs Fuel Trade Retaliation, Raising Global Economic Uncertainty

Trump has increasingly weaponized tariffs as a central pillar of his economic strategy, believing that they give the U.S. leverage over trading partners. This approach has deepened trade tensions worldwide, with countries now prepared to retaliate rather than concede.

One of the latest escalations occurred Tuesday when Trump announced plans to double tariffs on Canadian steel and aluminum imports to 50%. The move was a direct response to Ontario Premier Doug Ford’s 25% surcharge on electricity exports to the U.S. Trump’s action sent ripples through the North American market, with Canadian officials threatening countermeasures if the tariff increase was implemented.

However, following last-minute negotiations, Ford suspended the surcharge after striking a deal with U.S. Commerce Secretary Howard Lutnick to restart trade discussions. In response, Trump temporarily withdrew his tariff hike plans—a sign that he is willing to adjust his tactics when faced with strong pushback.

Yet, the bigger picture suggests that the tariff war is far from over. Several other key U.S. trading partners, including China and the European Union, have shown their readiness to retaliate, signaling that Trump’s aggressive stance will continue to provoke further economic conflicts.

China, which remains a primary target of Trump’s trade policies, has slapped tariffs on American agricultural products and key manufacturing components in retaliation for U.S. restrictions. Despite multiple rounds of negotiations, the two countries remain locked in a prolonged economic standoff. The European Union has also warned of countermeasures if Trump proceeds with his planned tariffs on European cars and technology products. European leaders have stressed that the U.S. should not expect unilateral compliance, and the EU is prepared to respond with tariffs on American goods, including whiskey, motorcycles, and textiles.

Mexico, another major U.S. trade partner, has previously imposed retaliatory tariffs on American pork, cheese, and bourbon in response to Trump’s earlier steel and aluminum duties. Mexican officials have hinted that if new trade restrictions emerge, they will not hesitate to retaliate again.

The ongoing tariff battles have sparked uncertainty in global markets, with businesses scrambling to adjust supply chains and hedge against potential new trade restrictions. Many industries—particularly manufacturing, automotive, and agriculture—have already felt the impact of rising costs and disrupted trade flows.

Bhatia emphasized that tariffs are not just affecting direct trade but also reshaping geopolitical dynamics.

“We’ve had very muted geopolitics in investing for a long period of time, and clearly tariffs are changing that,” he noted.

Trump’s aggressive trade policies have also led to concerns over economic insularity, with some warning that the U.S. risks isolating itself from global markets. Bhatia pointed out that trade wars could encourage more localized economies, where countries focus on domestic production and reduce reliance on international trade.

“Spurts of patriotism translate into people spending more locally in their own nation,” he said.

Given that consumer spending accounts for around two-thirds of U.S. GDP, an increase in domestic expenditure resulting from trade restrictions could prop up economic growth—but only if inflation and cost increases do not outpace consumer purchasing power.

“There is a high probability that a tariff-induced increase in domestic expenditure will cause the country’s GDP to do better than you anticipate,” Bhatia added.

No End in Sight for the Tariff War

With Trump doubling down on tariffs as a bargaining tool, many experts believe that the global trade war is set to continue throughout 2025 and beyond. As more countries push back with retaliatory tariffs, the risk of economic fragmentation and slower global trade growth increases.

For now, analysts say that the most immediate risks include inflationary pressures, supply chain disruptions, and slowing economic activity—all of which could contribute to the growing possibility of a U.S. recession by 2025.

Nigeria’s crude oil production suffered a setback in February 2025, as the country failed to sustain the momentum from its recent output increase. Data from the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) shows that the country’s daily average crude oil production declined by about five percent compared to January, raising fresh concerns about the country’s ability to maintain its OPEC production target.

The latest figures indicate that Nigeria’s crude oil production for February stood at an average of 1,465,006 barrels per day (bpd), down from the 1,538,697 bpd recorded in January. Although the drop appears relatively small, it represents a significant reversal of the steady gains recorded in previous months, fueling worries about the country’s long-standing production challenges.

The February output fell short of Nigeria’s allocated OPEC quota of 1.5 million barrels per day, with the NUPRC report noting that the country only managed to achieve 98 percent of the required production. The inability to sustain that momentum suggests Nigeria remains vulnerable to operational and structural issues within its oil sector.

The data further revealed that despite the drop in average output, Nigeria recorded a peak production of 1.7 million barrels per day in February, while the lowest daily production was 1.6 million barrels per day. However, these figures include condensates, which are not considered part of Nigeria’s crude oil production by OPEC. When condensates are factored in, Nigeria’s total daily average production in February stood at 1,671,953 barrels per day, comprising 1,465,006 barrels per day of crude oil and 206,948 barrels per day of condensates.

The overall crude oil production for February amounted to 41,020,155 barrels, marking a decline from January’s total output of 47,699,593 barrels. The February production also included 1,599,693 barrels of blended condensates and 4,194,849 barrels of unblended condensates. These figures were lower than those recorded in January when Nigeria produced 1,910,213 barrels of blended condensates and 4,252,071 barrels of unblended condensates.

The drop in output was reflected across the country’s major oil terminals, further underscoring the challenges affecting Nigeria’s oil production capacity. Forcados Terminal, which had the highest production, recorded 7.75 million barrels in February, down from 8.86 million barrels in January. Bonny Terminal, another major production hub, saw its output decline to 6.3 million barrels in February from 8.1 million barrels the previous month. Qua Iboe Terminal’s production also dropped, with 4.28 million barrels produced in February compared to 4.6 million barrels in January. Escravos Terminal recorded a decline as well, producing 3.87 million barrels in February, down from 4.48 million barrels in the preceding month. Similarly, Odudu Terminal’s output dropped to 2 million barrels in February from 2.3 million barrels in January, while Tulja–Okwuibome Terminal produced 1.89 million barrels in February, a decrease from 2.26 million barrels in January. These figures include both crude oil and condensates.

The latest drop in production comes at a time when Nigeria had been striving to restore investor confidence in its oil sector and strengthen revenue generation through increased output. The country has battled persistent challenges such as crude oil theft, pipeline vandalism, regulatory uncertainties, and underinvestment in upstream projects. While recent efforts by the government and security agencies have helped to curb some of these issues, the February figures indicate that the industry has yet to achieve sustained production stability.

The decline in oil output raises questions about Nigeria’s ability to meet its budgetary and revenue targets, particularly as oil remains the country’s main source of foreign exchange earnings. The setback also affects Nigeria’s standing within OPEC, where member countries are expected to adhere to production quotas as part of broader efforts to stabilize global oil prices. Although a Reuters survey had suggested that Nigeria exceeded its OPEC quota in February, the NUPRC data contradicts that claim, indicating that the country is still struggling to maintain a consistent production level.

The oil industry will now be looking ahead to OPEC’s upcoming Monthly Oil Market Report for February, which will provide a broader perspective on Nigeria’s performance relative to other oil-producing nations. The volatility of the global oil market, influenced by factors such as geopolitical tensions and supply chain disruptions, means that any decline in production could impact Nigeria’s economy.

Energy experts have pointed out that for Nigeria to achieve sustained growth in crude oil output, the government must address critical bottlenecks in the sector. There is an urgent need for improved infrastructure, enhanced security around oil facilities, and a more investor-friendly regulatory framework to attract both international and indigenous oil producers. Without these measures, analysts believe Nigeria risks falling further behind its production targets, limiting its ability to capitalize on global oil market trends.