Expert Predicts Recession in 2025 Amidst Ongoing Trade Disputes

A prominent financial expert has stated that a recession is highly probable this year if current tariff levels are maintained. Torsten Slok, the chief economist at Apollo Global Management, made this prediction during a recent television appearance. He emphasized that the economic outlook is contingent on the continuation of existing tariffs.

Slok estimates a 90 percent probability of a two-quarter contraction in economic output, leading to a four percentage point drop in gross domestic product, if the tariffs remain. The tariffs, initially implemented earlier this month, have already caused market volatility, resulting in significant gains and losses.

The tariffs, particularly those targeting China, are expected to disproportionately harm small businesses. Slok argues that these businesses are less equipped to absorb the increased costs associated with the tariffs compared to larger corporations. He highlighted the potential for widespread bankruptcies among retailers, which could significantly impact the labor market and consumer confidence.

A decline in the retail sector would negatively affect the labor market and consumer sentiment, given that small businesses, employing fewer than 500 people, represent a substantial portion of the workforce. Slok, who has held positions at various financial institutions and international organizations, pointed to weekly jobless claims as a key indicator of emerging weaknesses in the job market.

He noted that the impact of tariffs, especially those on China, continues to weigh heavily on small businesses. While the effects have not yet been fully reflected in jobless claims, he anticipates that this will change. Recession concerns have grown on Wall Street this month, compounded by the unpredictable nature of tariff policies, making it challenging for analysts to assess the full economic consequences.