President Donald Trump’s tariffs could unleash a recession on the US economy by this summer, Apollo’s chief economist Torsten Slok, said.
In a note over the weekend, Slok outlined a timeline for how the tariffs, especially steep duties on goods from China, could lead to a sharp slowdown in trade that crushes demand and fuels layoffs in trucking, retail, and beyond.
Here’s how the top economist sees an economic slowdown unfolding over the coming weeks.
Early to mid-May
Uncertainty has risen sharply following the chaos of the April 2 “Liberation Day” tariff unveiling and the subsequent 90-day delay of most reciprocal duties.
As April winds down, Slok flagged that the typical 20- to 40-day transit time for containerships from China suggests that container traffic to US ports could “come to a stop” by the middle of May.
Mid to late-May
From there, goods from ports typically take up to 10 days to reach cities nationwide via trucks and railroads.
That means that as container flows ebb, trucking demand could start to crumble by mid- to late-May, Slok said.
Late-May to early-June
By the end of May, the ripple effects of Trump’s tariffs could lead to “empty shelves” and force companies to respond to lower sales by laying off workers across the trucking and retail industries.
The rough timeline puts the US on track to enter a recessionary period this summer, Slok said.
He backed up his prediction with data, showing that companies and consumers are already negatively adjusting their behavior to the looming tariffs.
The outlook for corporate earnings has seen the sharpest decline since the COVID-19 pandemic in 2020. New orders across various indexes tracked by the Federal Reserve are “collapsing,” and recent surveys show a “sharp reversal” in corporate capex spending plans, Slok said.
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
Executives warn of recession signals
In addition to the data, executives at US firms are airing their concerns about recessionary behavior. Here are a few recent comments Slok flagged:
“I don’t care if you call it a recession or not, in this industry that’s a recession.” — Robert Jordan, CEO of Southwest Airlines, referring to expectations of lower revenue in the second quarter. “Saving money because of concerns around the economy was the overwhelming reason consumers were reducing the frequency of restaurant visits.” — Scott Boatwright, CEO of Chipotle, speaking on the restaurant chain’s first-quarter earnings call. “Relative to where we were three months ago, we probably aren’t feeling as good about the consumer now.” Jamie Caulfield, CFO of PepsiCo, speaking on the company’s first-quarter earnings call.
Betting markets see rising chance of recession
According to data from Kalshi, chances of a recession hitting the US economy in 2025 remain elevated, at 57% as of Monday morning.
The odds were about 43% just before Trump unveiled his tariffs on April 2 and just 19% the day before Trump was inaugurated for his second presidential term.
