Trade tariffs between the U.S. and China continue to pressure the American economy, raising concerns about a potential recession by 2025.
How Tariffs Impact the Economy
In an effort to support domestic manufacturing, the U.S. government has imposed high tariffs on Chinese imports, currently at 145%. These tariffs, along with a temporary 90-day regulation, have amplified market uncertainties. A significant 60% drop in cargo shipments indicates severe disruptions in supply chains nationwide.
Experts' Predictions
Economists warn that if current trade policies remain in place, the U.S. economy could face a 4% contraction in Gross Domestic Product (GDP) and a recession lasting two quarters. Research from organizations such as Polymarket and JP Morgan indicates a 56% to 60% probability of an economic downturn. Torsten Slok from Apollo Global Management states: "If tariff conditions remain stable, a recession by 2025 is likely."
Impact on Small Business
Small businesses appear particularly vulnerable in this economic environment, with risks of bankruptcies and layoffs looming. Upcoming unemployment reports are expected to provide a clearer picture of these challenges. Meanwhile, major retailers are sounding alarms that looming supply chain issues could adversely affect the job market.
Ongoing trade tensions continue to pressure the U.S. economy. Emerging risks, such as high tariffs and potential GDP declines, emphasize the need for timely and proactive measures to stabilize the markets.
