A US recession is looming in the near future due to heightened tensions with China, according to the analysis of Torsten Sløk, the chief economist with Apollo Global Management. There has also been a sharp decline in container shipments coming from China in to US ports after President Trump placed a 145% tariff on Chinese imports. Economists predict this will result in store shelves becoming empty and inflation rates surging for heavily imported goods from China, including toys, apparel, furniture, and more.
It is also expected that US labor workers, particularly in retail, logistics, and transportation, will face the ripple effect of the new tariffs. The decrease in imports has led to lower demands for freight services, meaning potential job losses. Smaller retail businesses such as independent clothing and toy stores are most susceptible due to their limited capacity to absorb added costs.
Economists are comparing this current situation with the early stages of the COVID-19 pandemic, shown by the similar supply chain disruptions and consumer shortages. Additionally, if current trade policies continue, Sløk estimates a 90% probability of a U.S. recession in 2025. This combination of reduced imports, rising inflation, and potential job losses paints a gloomy outlook for the future.
This is a great breakdown of the situation. The parallels to early COVID-19 disruptions are especially concerning, and it's alarming how quickly tariffs can ripple through the economy, from higher consumer prices to trucking layoffs. If smaller retailers start shutting down, the impact on local communities could be severe. Hopefully policymakers recognize the risks before the damage becomes too deep.
ReplyDeleteseeing the immediate results of the tariffs is definitely a red flag. I think the long-term effects of the tariffs will be interesting to see in the future.
ReplyDeleteTorsten Slok’s analysis shows how trade issues with China could really hurt the U.S. economy. Higher tariffs mean fewer imports, higher prices, and possible job losses in retail and shipping. If things don’t change, a recession in 2025 seems likely.
ReplyDeleteIt’s crazy to think we could see empty shelves again like during COVID, but this time because of policy choices. The impact on jobs in retail and shipping is super concerning too, it’s a chain reaction that could definitely push us into a recession if things don’t change soon.
ReplyDelete