Economist from Apollo: Trump's High Tariff Policy Predicted to Cause U.S. Economic Recession by Summer 2025

In the spring of 2025, the U.S. economy faced a supply chain crisis due to the Trump administration in the United States increasing tariffs on Chinese imports to 145%. Container volumes at ports plummeted, retailers such as Walmart warned of product shortages, the demand for trucking services collapsed, and manufacturers such as Mack Trucks laid off workers. Torsten Slok, chief economist at Apollo Global Management, predicted that these factors would lead to a U.S. economic recession in the summer of 2025, showing signs of stagflation.

Apollo's Timeline: The Chain Reaction from Port to Shelf

In early April 2025, the U.S. government increased tariffs on Chinese imports to 145%. According to Apollo's analysis, this policy quickly led to a significant decline in container ship traffic departing from China. According to Bloomberg and shipping data, 80 scheduled voyages from China to the U.S. were canceled in April, a 60% reduction, far exceeding levels seen during the pandemic.

Since it typically takes 20 to 40 days for cargo ships to travel from China to U.S. ports, Apollo predicts a cargo shortage at major U.S. ports starting in mid-May. This will result in retailers being unable to restock, with empty shelves appearing from late May to early June. Retail giants such as Walmart, Target, and Home Depot warned President Trump on April 21 that supply chain disruptions would drive up prices and lead to product shortages.

The Collapse of Trucking and Logistics

As port cargo volumes decrease, the demand for trucking also collapses. Apollo notes that it usually takes about 10 days to distribute goods from ports to various parts of the country, so the trucking industry is expected to feel the impact in late May. According to reports from The Wall Street Journal and FreightWaves, logistics and trucking companies have already started layoffs.

Mack Trucks and Volvo Group announced in mid-April that they would lay off a total of 550 to 800 people at factories in Pennsylvania, Virginia, and Maryland. Mack cited the economic uncertainty caused by the new tariff policy and a significant drop in new truck orders as reasons for the layoffs. Volvo revised its 2025 North American heavy truck demand forecast downward from 300,000 units to 275,000 units.

Additionally, the Trump administration issued an executive order in late April requiring truck drivers to demonstrate English proficiency, further exacerbating the driver shortage problem. FreightWaves noted that this policy could reduce the number of available drivers in the short term, putting additional pressure on an already struggling transportation industry.

Warnings for Retail and Manufacturing

Apollo's report indicates that the retail industry is the next to be affected. Due to product shortages and rising prices, consumer spending is expected to be suppressed. According to the University of Michigan's April consumer confidence survey, the index has dropped from 57 in March to 52.1, with nearly two-thirds of respondents expecting unemployment to rise in the coming months.

In the manufacturing sector, toy manufacturers such as Basic Fun have reported that customers have already suspended orders, and if tariffs remain unchanged, they face the risk of order cancellations. The company's CEO stated that these tariffs are "equivalent to an embargo," dealing a heavy blow to companies reliant on the Chinese supply chain.

Economic Data and Business Confidence Decline in Tandem

According to the Atlanta Federal Reserve's GDPNow model on April 24, the U.S. first-quarter GDP annual growth rate forecast has been revised down from -2.2% to -2.5%. Goldman Sachs and Bank of America also predict first-quarter GDP will record negative growth of -0.2% and -0.4%, respectively.

A survey conducted by Chief Executive magazine in April showed that 62% of business executives expect the economy to slow down or enter a recession in the next six months, with the proportion expecting a "severe recession" rising from 9% in March to 14%. The proportion of companies that initially expected revenue growth has dropped from 84% to 49%, while the proportion expecting revenue decline has risen from 9% to 44%.

Apollo's Warning: Stagflation and "Voluntary Recession"

Apollo's chief economist, Slok, pointed out that this economic shock triggered by the trade war has typical "stagflation" characteristics—stagnant economic growth alongside rising prices. He described it as a "voluntary trade reset recession," driven by policy choices rather than natural market adjustments.

According to Apollo's timeline, starting in mid-May, the U.S. will face supply chain disruptions, a collapse in trucking demand, retail inventory depletion, and a wave of mass layoffs. These factors are expected to be fully reflected in employment and consumption data by early June, marking the official entry of the U.S. economy into a recession.

Economist from Apollo: Trump's High Tariff Policy Predicted to Cause U.S. Economic Recession by Summer 2025

Key Updates

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