There’s a high chance—about 90%—that the United States could enter a recession in 2025 if trade policies aren’t changed, according to experts at Apollo. These warnings come as trade discussions with around 90 countries have slowed down global business. This could lead to problems like supply chain issues, higher prices, and many small businesses closing, said Torsten Slok, Apollo’s top economist.
The current trade talks are complicated and involve negotiating tariffs on countless products, from medicines to garden tools. They also cover things like worker rights, environmental rules, and online trade regulations. Slok noted that finalizing these agreements usually takes around 18 months because of all the details involved. He pointed out that sudden tariff increases, like the jump from 3% to 18% under President Donald Trump, ignored how complex these deals are.
Small businesses, which provide four out of every five jobs in the U.S., are at serious risk. Unlike big companies, they can’t handle sudden cost increases from tariffs. This could force them to cancel orders or even shut down. Slok warned that ports might get backed up with ships unable to unload, and local shops could struggle to survive. Apollo’s research shows small businesses are responsible for 85% of private investment, so their struggles could hurt the whole economy.
If these tariffs go into effect, they could cut economic growth by nearly 4% in 2025, a much bigger hit than the 0.25 to 0.7% drop seen during the 2018 U.S.-China trade war, according to studies from Brookings and the National Bureau of Economic Research. Slok explained that the uncertainty from these trade issues could make people and companies spend less, making the economic damage even worse.
To avoid this, Apollo suggests keeping Canada and Mexico out of the new tariffs and slowly introducing tariffs on less important Chinese goods over 18 to 24 months. Without these changes, Slok believes the U.S. could create its own economic crisis. Many small businesses are already cutting back on imports, and Apollo warns that there’s little time left to act.
Small businesses (1-249 employees) drive U.S. job growth. Between February 2020 and February 2025, their share of job openings grew from 72% to 77%. Medium firms (250-4999 employees) fell from 26% to 19%, while large firms (>5000 employees) stayed steady at 2-3%.
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