Apollo pointed out that the impact of tariffs on USA businesses and households has already become apparent. Given the current timeline of the tariffs, it is expected that the USA will enter a recession by the summer of 2025.
Recently, the Chief Economist of Apollo, Torsten Sløk's team, used charts to demonstrate how consumers and businesses in the USA are responding to tariffs.
According to Apollo's charts, the impact of tariffs on USA businesses is already apparent. New Orders are declining, capital expenditure plans are decreasing, inventories are rising before tariffs take effect, and companies are lowering their profit expectations.
For ordinary families in the USA, the Consumer Confidence Index has fallen to historic lows. To avoid price increases caused by tariffs, consumers have been purchasing Commodities in advance before the tariffs are implemented, which undoubtedly overdraws future purchasing power. At the same time, the Tourism Industry, especially international travel, is also showing signs of slowing down.
Apollo: A recession may begin in the summer of 2025.
Apollo analyzed the process of economic recession from April 2025 to summer. Factors such as tariff adjustments and extended transportation times have led to supply chain disruptions, affecting economic activity, and ultimately, a recession may begin in the summer of 2025. Specifically:
April 2:
The USA announced reciprocal tariffs;
20-40 days – Container Marine Transportation time.
From early May to mid-May:
The volume of container arrivals at USA ports dramatically decreased;
1-10 days -- Truck/Railroads Transportation time from ports to cities.
From mid-May to late May:
The volume of inland freight in the USA dramatically decreased;
Market shelves began to empty, and businesses needed to cope with reduced sales.
From late May to early June:
Freight and Retail Trade in the USA are initiating layoffs;
Summer 2025 – the USA enters a recession.
Tariffs have caused the largest decline in the S&P 500 Index companies' expected EPS for the next 12 months since 2020:
Tariffs have led to a collapse in new Orders:
And a sharp reversal in corporate capital expenditure plans:
Increased corporate cost pressures and rising prices:
Before the tariffs took effect, corporate inventories rapidly increased:
Corporate executives are concerned about a recession in the economy.
Apollo also listed quotes from executives of well-known companies over the past week, reflecting their views on the current economic situation.
Southwest Airlines Chief Executive Officer Robert Jordan said:
"I don't care if you call it a recession, in this Industry, that is a recession."
Chipotle Chief Executive Officer Scott Boatwright said:
"Due to concerns about the economy, consumers are reducing the frequency of going to Restaurants, which is the main reason they are saving money."
PepsiCo Chief Financial Officer Jamie Caulfield said:
"Compared to three months ago, our feeling about consumers may not be as good now."
Editor/rice
