Recession fears are mounting in the U.S., and tariffs are increasingly under fire. According to Torsten Sløk, Chief Economist at Apollo Global Management, the economy is “almost certain” to tip into a recession if the current tariff policies under the Trump administration persist. This warning doesn’t come out of the blue—American retailers and small businesses have already begun feeling the pressure, and the market is becoming more sensitive to economic risks.
Since April 9, when the U.S. imposed punitive tariffs as high as 145% on Chinese imports, small and medium-sized businesses that depend on overseas supply chains have been sounding the alarm. Retailers and sporting goods companies in states like Wyoming and Colorado are now struggling with tightening cash flow. Many say their reserves simply aren’t enough to absorb the sudden increase in costs. According to estimates from Apollo’s research team, if these tariffs stay in place for 90 days, over 3,500 regional retailers are likely to seek bankruptcy protection—roughly 1.8 times last year’s figure over the same period.
On the monetary policy front, the Federal Reserve finds itself in a tough spot. Inflation data from April showed a 4.7% year-over-year increase in the consumer price index, yet second-quarter GDP growth came in at a mere 0.3%—the slowest in over a year. This unusual mix of rising prices and slowing growth has reignited concerns over stagflation. Economists at JPMorgan note that the Fed is now caught in a bind: curbing inflation without choking growth further will be extremely difficult.
International supply chains are also evolving quietly. The average container dwell time at ports in Los Angeles and Long Beach—the busiest in the Western U.S.—has climbed to 12.7 days, a nearly 80% increase since the new tariffs were introduced. Facing both cost and efficiency pressures, many U.S. companies have pivoted toward Southeast Asia. Vietnam, in particular, is seeing a sharp boost in factory zone demand—in Ho Chi Minh City, industrial land demand surged more than 200% between early and mid-April. But while this may ease some long-term dependency on China, it also brings short-term cost burdens. Credit agencies have started downgrading their outlooks for several U.S. sectors, including the automobile industry, which has now been moved to a “negative” rating.
Financial markets haven’t been spared from the turbulence. On April 21, the CBOE Volatility Index (VIX)—a widely followed gauge of market fear—spiked 29% in a single day, the largest jump in nearly three years. Investors rushed into safe havens, pushing gold to $2,450 per ounce—up more than 5% in a week—as they reposition portfolios in response to increased economic uncertainty.
At the White House, officials are working to ease investor nerves. National Economic Council Director Kevin Hassett held a press conference, claiming that the economy’s fundamentals remain strong. He pointed to a 0.9% year-on-year increase in March retail sales as evidence. But many economists aren’t convinced. They suggest the rise may stem from consumers rushing to make purchases out of fear that prices will keep climbing. Deutsche Bank’s analysis echoed this, noting that most of the growth came from essentials like medicine and healthcare products—not a signal of broad-based confidence among consumers.
On the global stage, international organizations are raising alarms about the U.S. economy. The International Monetary Fund (IMF) has slashed its growth forecast for the U.S. in 2025 to just 0.4%—down from its previous estimate of 1.2%—warning that trade policy uncertainty now poses a greater risk than geopolitics. Meanwhile, the head of the World Trade Organization cautioned that if tariff confrontations drag into the third quarter, we could see a repeat of the devastating trade collapse triggered by the Smoot-Hawley Tariff Act of the 1930s.
Perhaps most telling is public sentiment. A joint poll from The Wall Street Journal and NBC reports that more than 60% of American voters believe the government should focus on the economy above all else. As the 90-day tariff window nears its end, all eyes will be on whether the White House adjusts course to avoid further economic fallout. For business leaders and investors alike, the coming weeks could be pivotal in charting the path ahead.