Apollo Global Management has warned that President Trump’s proposed tariffs could set off a chain reaction leading to a recession by the summer of 2025, and that Americans might begin to notice store shortages as early as May.
Torsten Slok, Apollo’s chief economist, outlines a timeline in which April tariff announcements disrupt shipments from China. Those disruptions would create supply chain bottlenecks visible in May, force layoffs in the retail and trucking sectors by June, and push the economy into recession during the summer months of 2025.
Not everyone agrees on the severity or timing of these effects. U.S. Treasury Secretary Lael Brainard has called escalating trade tensions with China “unsustainable,” but does not foresee a complete recession. Some market analysts also point out that existing inventory levels at retailers could delay the appearance of shortages and other visible impacts for several months.
The scenario described by Apollo highlights how quickly policy changes can ripple through global trade networks. Tariffs increase the cost and complexity of importing goods, prompting delays and higher prices that can reduce consumer demand. For industries closely tied to cross-border logistics—particularly retail and trucking—those shifts can translate rapidly into reduced revenue and job cuts if companies cannot absorb or pass on the added costs.
Timing is a central element of the warning. If tariff announcements are made in April, shipped goods already in transit or awaiting departure may be delayed as carriers and importers adjust paperwork, routes, and compliance procedures. That disruption can create immediate shortages of certain products in May, even if broader demand remains intact for a time. Retailers often rely on a steady flow of imports to meet seasonal demand; interruptions can therefore have outsized effects on availability and pricing.
Businesses in the logistics sector could face acute stress as shippers reroute cargo and trucking firms manage reduced volumes and longer turnaround times. In Apollo’s forecast, those pressures would prompt layoffs in June, weakening household incomes and consumer spending just as inventories shrink—an outcome that could deepen into a broader economic downturn by summer 2025.
Despite the possibility of these outcomes, uncertainty remains. Inventories built up ahead of tariff changes, variations in how firms respond, and potential policy adjustments could all alter the projected timeline. Some firms may accelerate orders, diversify suppliers, or seek alternative shipping routes to blunt the impact. Fiscal or monetary responses from policymakers could also cushion the blow to consumer demand.
Investors and policymakers will be watching indicators such as retail sales, trucking employment, import volumes, and inventory-to-sales ratios for early signs that the supply-chain effects are materializing. If shortages and layoffs begin to appear in the months Apollo describes, it could force quicker policy responses to stabilize markets and support affected workers.
In short, Apollo’s warning serves as a reminder that trade policy shifts can have rapid and significant consequences for supply chains, employment, and economic growth. While the precise timing and severity of a potential recession remain debated, the risk underscores the interconnectedness of global trade and the domestic economy, and why businesses and policymakers monitor tariff proposals closely.