The Impending Economic Impact of Tariffs: Insights from Apollo Global Management

The effects of tariffs introduced by the Trump administration are expected to surface soon, potentially leading to a recession this summer, as highlighted by Apollo Global Management. Chief economist Torsten Slok laid out a detailed timeline indicating when consumers may begin experiencing the repercussions of these trade policies.

Timeline of Economic Impact

According to Slok’s presentation, the timeline for the economic impact of tariffs is as follows:

• April 2: Announcement of tariffs, with a noticeable slowdown in containership departures from China.
• Early to Mid-May: Containerships destined for U.S. ports may come to a standstill.
• Mid to Late May: A halt in trucking demand could lead to empty shelves and reduced sales for companies.
• Late May to Early June: Possible layoffs in the trucking and retail sectors.
• Summer 2025: Predicted onset of recession.

Source: Apollo Global Management

Signs of Recession

Supporting the notion that a recession may be forthcoming, Apollo’s report noted a significant decline in new business orders, earnings forecasts, and capital expenditure plans in recent weeks. Despite some tariffs being paused, the administration has increased duties on Chinese goods, with current rates reaching as high as 145%.

China’s Role in U.S. Trade

While imports from China are significant, the U.S. also sources goods from a variety of other countries. In 2024, the U.S. imported approximately $438.9 billion worth of goods from China, making it one of the top trading partners.

Contrasting Perspectives

While many analysts, particularly on Wall Street, suggest a recession could occur in 2025, Slok’s predictions may be more pessimistic. Treasury Secretary Scott Bessent has expressed a belief that the current tariff situation with China is “unsustainable,” yet he also mentioned an anticipated “detox period” for the economy without a definitive recession outlook.

Possible Mitigating Factors

There are indications of a “pull-forward” effect, where orders were placed before the tariffs were announced, possibly providing a buffer that prevents immediate shortages. Bernstein analyst Aneesha Sherman advises against immediate assumptions of depleted inventories, noting that stock levels remain elevated and that demand has begun to wane.

This situation highlights the delicate balance between trade policies and their potential economic ramifications, requiring vigilant monitoring as the timeline progresses.