Retail nightmare incoming? Donald Trump's trade policies may lead to empty shelves and full-blown recession by June
Experts warn that US President Trump's escalating trade war with China is set to significantly impact American businesses and consumers. Apollo Global Management predicts potential disruptions by mid-May, including halted freight transport and empty shelves. The National Retail Federation anticipates a substantial decline in US import cargo volumes, signaling a challenging economic period ahead.
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A wave of economic uncertainty is sweeping over the United States as experts caution that US president Donald Trump's deepening trade war with China is poised to land a tough blow on American businesses and consumers this summer, as per a report.America could start feeling the weight of the tariffs by mid-May, with empty shelves in stores, suspended freight transport, and a recession looming as early as June, according to a report published by management firm Apollo Global Management Apollo's head economist Torsten Slok explained the chronology; after Trump announced his "liberation day" tariffs on April 2, it takes about 20 days to 40 days for container ships to sail to the United States from China, so, Slok estimates that container ships coming to US ports could come to a stop by mid-May, as per Investor's Business Daily (IBD).Slok pointed out that, it then takes about 1 day to 10 days of transit time for trucking/rail to bring goods from the ports to cities, as per the report. Apollo Global Management forecasted that by late May, domestic freight demand will "come to a halt" and that there will be "empty shelves" with companies responding "to lower sales," reported IBD.According to the report, Slok predicted that there will be layoffs in domestic freight by early June, and retail industries will be hit with recession in the US, this summer.Logistics companies such as Flexport reported a decline in shipments from China to North America, with cancellation rates reaching 50%, a level not seen since the early stages of the COVID-19 pandemic, as per IBD.Flexport revealed that the short-term outlook for shipment-volume growth from Southeast Asia to North America "remains muted," as per IBD.Schwab Chief Global Investment Strategist Jeffrey Kleintop said, "Ports are unloading above-average container arrivals in the past couple of weeks that were stocking up ahead of the tariffs," as quoted in the report. Kleintop mentioned that, "But for booking in the weeks and months ahead, we are seeing falling demand and high cancellation rates rivaling those of the pandemic," quoted IBD.The National Retail Federation (NRF), whose members include large retailers such as Walmart and Target, has cautioned that US import cargo volumes would decline by at least 20% year-on-year in the second half of 2025, as per the report. This is mainly because US businesses are halting orders from China due to the trade tensions between both nations, according to IBD.Tariffs have caused a major slowdown in shipping, with companies like Flexport reporting 50% cancellation rates for shipments from China, as per Investor's Business Daily.Yes. By late May, the domestic freight demand is predicted to halt, which means fewer goods will reach US cities, potentially leading to empty shelves in stores.
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