Latest news with #VoluntaryTradeResetRecession
Axios
03-05-2025
- Business
- Axios
Trump says short-term recession OK: "This is a transition period"
President Trump says a recession is OK in the short term, in a clip of a pre-recorded interview with NBC's "Meet the Press with Kristen Welker" released on Friday. Why it matters: Business owners and politicians alike have shared fears of a recession given the uncertainty surrounding the president's tariffs. Apollo chief economist Torsten Slok put the probability of a Voluntary Trade Reset Recession at 90% in a 40-page slide deck last month. The latest: When Welker asked Trump if he's "comfortable with the country potentially dipping into a recession for a period of time" if he were able to achieve his long-term goals, the president initially avoided answering the question directly. "Some people on Wall Street say that we're going to have the greatest economy in history. Why don't you talk about them?" he instead said. But after Welker pushed more, Trump responded that "yeah, everything's OK. I said, this is a transition period. I think we're going to do fantastically." When asked if he were worried about a recession, Trump said: "Anything can happen. But I think we're going to have the greatest economy in the history of our country. I think we're going have the greatest economic boom in history." The full interview will publish on Sunday.
Yahoo
02-05-2025
- Business
- Yahoo
Americans Really Dislike Trump. But They're About to Truly Hate Him.
Donald Trump's first 100 days in office may have been the longest, figuratively speaking, of any U.S. president in history. But we can also say definitively that they were the most disastrous, ever. His draconian deportations, destruction of the federal government, and insane tariff Tilt-a-Whirls have driven his approval numbers so low as to be a modern marvel; the last time a president was this disliked after 100 days, we were fighting a world war and the Slinky was the country's most popular toy. Trump has ended up here for no other reason than that he pursued the very policies he promised to pursue on the campaign trail. That's the story of his first 100 days: Americans elected a dumb asshole, and natural consequences followed. Now let's consider the next 100 days, which look to be even worse for all of us—including the president. As The New Republic's Alex Shephard wrote this week, there are a lot of good reasons to believe Trump's standing with the American people hasn't hit bottom yet, the main one being that the worst is yet to come. The president, Shephard writes, 'is still stubbornly clinging to tariffs, which inevitably will cause product shortages and rising costs in the near future—not to mention a potential recession, the odds of which are worryingly high.' Last weekend, Apollo Global economist Torsten Slok published a preview of coming attractions in the form of a report documenting what he's calling the imminent 'Voluntary Trade Reset Recession.' As Slok documents, Trump's economy—though quite sluggish—has been boosted by the fact that inventories rose rapidly as firms acted in anticipation of tariffs being imposed. Now that tariffs have arrived, the sugar high is over and collapse is on the way. The most straightforward way of looking at the future is on page 4 of Slok's report. What we have here is the prelude to the summer of scarcity, coming soon to a retailer near you. We are already well and fully in the stage where activity at our ports falls off a cliff. As TNR's Tim Noah wrote this week: This is how it begins. The recession has arrived in Seattle, with cargo shipments down 60 percent. Los Angeles will be next. As recently as November, the Los Angeles Times reported that cargo traffic at the ports of Los Angeles and Long Beach reached record highs. But last week it quoted the port's executive director, Gene Seroka, predicting that 'in two weeks' time, arrivals will drop by 35 percent.' The reason, Seroka said, was that 'essentially all shipments out of China for major retailers and manufacturers have ceased, and cargo coming out of Southeast Asia locations is much softer than normal.' From here, Tim says, there will be less cargo to ship across the country, and inevitably, fewer people employed to do that work. Already, UPS has laid off 20,000 workers because of 'current macro-economic uncertainty' that I really think wasn't all that uncertain when Trump was reelected. This only highlights another grim reality: Even if Trump called off his tariffs tomorrow, much of the coming mayhem is baked into our future, as it would take a substantial amount of time to restart the global shipping machine. 'Expect ships to sit offshore, orders to be canceled, and well-run generational retailers to file for bankruptcy,' says Slok. The latter half of that prediction may well be the more devastating part. As Marketwatch's Steve Goldstein highlighted, Slok said that 'small businesses that account for more than 80 percent of employment and capital expenditure don't have the working capital to pay tariffs.' In other words, Trumpnomics will soon be best known for that which is absent: products on the shelves of retailers, and businesses on the streets where you live, now shuttered. Here is where the Wall Street versus Main Street divide is going to be keenly illuminated as Trump's tariffs start the economic bloodletting. The White House has rather persistently explained away the turmoil its tariffs have wrought as a harm done only to high-flying financiers, and claimed that the benefits to ordinary people would soon emerge. A day after he got hit with a hundred dreadful evaluations of his first 100 days, Trump was spinning out on Truth Social, promising that the boom was on the wing. But even as the stock markets have pitched and yawed as investors cling to their naïve beliefs that Trump has a plan (he doesn't), those plying their trade on Main Street are planning for a different sort of boom. To hear Casey Ames—the founder of Harkla, a small, 10-person firm in Idaho that sells products for special needs children—tell it, Trump's tariffs have already forced him to make some grim considerations. Ames told the Idaho Statesman that his company was set to have a banner year. 'We had just hired more people, and we were forecasting a really good year, even with the initial Trump tariffs,' he said. Now, however, he's facing a massive hike in the amount of import taxes he'll have to pay, from $26,000 to $346,000. With no domestic manufacturer capable of supplying the same goods, and knowing that even modest price hikes could crater sales, Ames is suddenly facing a situation where he may have to lay off employees. Ames has garnered a lot of attention for sharing his experiences on social media, taking his audience behind the curtain to reveal what small-business owners have to expect as the summer of scarcity begins. Over at The New York Times, where they've been doing a long-running bit where Frank Luntz interviews the 14 dumbest voters in America, this fissure recently emerged: Meagan, the focus group's lone small-business owner, told Luntz that the tariffs were a 'very, very scary thing' and that she was, as a result, in 'crisis mode.' If reality has started to penetrate Luntz's Delulu Conclave, we're all in for a world of hurt. And that's probably the most dreadful reckoning, as we mark the 100th day of Trump's second term. Trump's collapse in public opinion polling—along with the fact that he's not likely to reverse many of his worst decisions or repair the things he's broken—has probably set his presidency on the road to ruin. But if Trump has truly sown the seeds of his own undoing, it will be ordinary Americans who reap the proceeds of that dire harvest first, in the form of lost livelihoods and scuppered wealth. It's going to be a rough summer—and many seasons thereafter, until one day we finally hit the nadir of Trumpian article first appeared in Power Mad, a weekly TNR newsletter authored by deputy editor Jason Linkins. Sign up here. If you're a small-business owner with a story to tell about how tariffs are impacting your bottom line, contact my colleague Grace Segers.
Business Insider
01-05-2025
- Business
- Business Insider
The smartest things economists are saying about a possible recession
Is a US recession going to happen soon? Economists have varying opinions. In the first quarter of this year, real US gross domestic product fell for the first time since 2022, partly due to a surge in imports as businesses prepped for tariffs from the Trump administration. That doesn't mean there's a recession, and job growth and other measures don't indicate a downturn just yet. It could take a while to see strong evidence in hard data, and the US could even avoid a recession this year. Consumer sentiment has tanked, and business optimism has dropped amid a jump in economic uncertainty. Some companies are pulling back on guidance. Here's what economists have said about the chances of a recession coming soon and how it would affect Americans. Claudia Sahm "We're on a path toward a recession, but it is clear what can get us off that path and that would be less aggressive policies," Sahm, chief economist at New Century Advisors, told Business Insider. Sahm said there has been some easing from the Trump administration, such as a 90-day pause on many tariffs. "At the end of the day, it'll depend on what these policies are, but I don't think a recession is imminent," Sahm said. Sahm said even if there isn't a recession in 2025, the economy is likely to slow, and people will have to get used to some adjustments, such as a tougher job market. If there is a recession, she said it would be "not a severe drop off a cliff type of recession." Paul Krugman Krugman, a Nobel Prize-winning economist and a CUNY Graduate Center professor, cautioned in a Substack post against reading too much into the latest GDP estimate. "Remember, measured GDP shrank in the 1st quarter of 2022, and that didn't presage a recession — in fact, that was probably just statistical noise," Krugman said on Wednesday. Despite that, he warned in a Substack on Tuesday about a "disastrous effect" from the trade war. "Tariffs always raise prices," Krugman said. "But the sheer size and suddenness of Trump's tariffs, combined with the paralyzing effect of uncertainty about what comes next, are about to deliver a Covid-type supply shock to an economy already sliding into recession." Torsten Sløk Sløk, the chief economist at asset management firm Apollo Global Management, said in a post on April 19 that "tariffs have been implemented in a way that has not been effective, and there is now a 90% chance of what can be called a Voluntary Trade Reset Recession." A chartbook from Apollo showed that this would mean a recession in the summer. But Sløk said it's not too late to avoid one. The US could form some kind of agreement with Mexico, Canada, China, and others. "For Mexico and Canada, there is a unique opportunity for the US to move first and get an agreement where labor, capital, and natural resources can be efficiently used in the North American economy," Sløk said. Olu Sonola "For now, we don't have a recession in the cards," Sonola, head of US economic research at Fitch Ratings, told Business Insider. "That view is predicated on the assumption that tariff rates do not escalate further. A stagflationary shock is a more likely scenario with relatively weak growth and higher inflation; that risk has materially increased since April 2nd." Diane Swonk "We have a shallow recession starting in the second quarter and persisting through the fourth quarter," Swonk, chief economist at KPMG, told Business Insider. "The rebound is also weak, barring a major stimulus package, which could see backlash from the bond market." Swonk sees some early recession indicators flashing red. "The drop in consumer attitudes is in recession territory," she said. "The deterioration in job security we are seeing is particularly worrisome." Some Americans could be more affected by a recession than others. "Inequality has worsened, with the top 10% of earners accounting for nearly half of all consumer spending," Swonk said. "Low- and middle-income households lack the cushion on savings triggered by COVID-era stimulus, which leaves them the most vulnerable to those losses." Cory Stahle Stahle, an economist at the Indeed Hiring Lab, said in commentary Tuesday after new job openings and turnover data that "fears of an impending recession have drowned out the calls for a soft landing. Since economic decisions are often shaped by expectations, it's possible that conditions may worsen in the coming months if people start behaving like they are in a recession. Softening some of the recent trade policy changes may ease some business concerns, but it may already be too late." Eric Rosengren Rosengren, former president of the Federal Reserve Bank of Boston and a visiting scholar at MIT, recently told Yahoo Finance there's a 50% or 60% chance of a recession, higher than earlier this year. "Tariffs can both slow down growth, which causes higher unemployment, and they can also raise prices and potentially start affecting the underlying rate of inflation," he said. Dana Peterson Peterson, chief economist at The Conference Board, told Business Insider in mid-April that a recession isn't The Conference Board's base case, but the organization expects weakening growth, faster inflation, and increasing unemployment. "The US actually is coming off of very strong fundamentals," Peterson said, adding that many people are working and there had been "sizable contributions from government spending on the industrial policies." David Kelly "The most likely scenario, at this stage is that, having lingered at the edge of recession, the economy slides into a shallow one later this year," Kelly, chief global strategist at J.P. Morgan Asset Management, said in a note on Monday. However, a mild recession this year could spur the government to take action, and Kelly said it "could set the stage for moderate fiscal stimulus in 2026, which, while further worsening the deficit, should be enough to restart economic growth. The Administration would likely take note of the damage done by tariffs and extreme reductions in immigration and federal government employment and could soften these policies." Desmond Lachman Lachman, a senior fellow at the conservative-leaning think tank American Enterprise Institute, said in an op-ed on April 21 that there are many reasons to expect a US recession. "Tariff policy-induced economic uncertainty now delays investment and consumer spending; a tax increase is hitting households in the form of higher prices; equity and bond prices are being pummeled by a loss of faith in American economic exceptionalism; and the upending of the rest of the world economy will certainly have spillover on the U.S. economy," Lachman said. Mark Hamrick Hamrick, a senior economic analyst at Bankrate, told Business Insider that there's a risk that a contraction continues, but it is not guaranteed. "At issue is whether the consumer continues to power the economy and whether they'll have the wherewithal and desire to remain engaged as purchasers," Hamrick said. "With imports being sharply curbed and prices likely set to rise, their ability and desire to buy, not dissimilar from the supply chain disruption days of COVID, will be watched closely." Hamrick said there's "a difference between the official declaration of a recession and how consumers can feel, as affirmed by the fact that many consumers have incorrectly associated their reduction in buying power in the face of elevated prices with a recession."
Forbes
30-04-2025
- Business
- Forbes
Trump Says It'll Be ‘Sort Of Biden' If GDP Keeps Dropping—After Blaming Him For Shrinking Economy
President Donald Trump on Wednesday blamed a quarterly drop in the U.S. gross domestic product on former President Joe Biden and said a drop in the second quarter could also be the former president's fault, passing the blame for the latest economic woes even though he has taken credit for stock market surges as far back as 2024. US President Donald Trump looks on during a cabinet meeting in the Cabinet Room of the White House ... More in Washington, DC, on April 30, 2025. (Photo by JIM WATSON/AFP via Getty Images) Trump said in a televised Cabinet meeting that the GDP's 0.3% decrease in the first quarter of 2025 is 'Biden, not Trump,' claiming the quarterly numbers do not apply to his administration since it came into power in January. Trump added 'you could even say the next quarter is sort of Biden.' The president also said in a Truth Social post Wednesday morning 'This is Biden's stock market,' saying the former president 'left us with bad numbers' and claiming the positive effects of his sweeping tariff policies, which have created concerns of an impending recession, 'will soon start kicking in, and companies are starting to move into the USA in record numbers.' The comments from Trump contradict his own claims from last January, when he said 'THIS IS THE TRUMP STOCK MARKET' and took credit for market gains under the Biden administration. Trump claimed the stock market was performing well because investors were projecting he would win the presidential election. The president also took credit for the stock market surge during the leadup to his inauguration, saying at a rally, 'It's too braggadocious, but we'll say it anyway, the Trump effect. It's you. You're the effect.' Get Forbes Breaking News Text Alerts: We're launching text message alerts so you'll always know the biggest stories shaping the day's headlines. Text 'Alerts' to (201) 335-0739 or sign up here. The GDP slid 0.3% in the first quarter, marking the weakest economic performance the U.S. has recorded since the first quarter of 2022. Outside of Wednesday's drop, negative GDP growth has happened just three times over the past decade, with two of the occurrences happening during 2020, when the COVID-19 pandemic routed global markets. While the economy has faltered in recent months as the Trump administration implements tariffs, cuts down on government spending and slashes the federal workforce, the president has insisted that returns on his economic policies will take time. Trump addressed his tariffs in a joint speech to Congress last month, saying, 'There'll be a little disturbance, but we're OK with that. It won't be much.' As markets continued reeling in March, Trump blamed poor stock performances on 'the really bad four years that we had.' By April, economists provided varying outlooks on the possibility of a recession, with Torsten Slok, the chief economist at Apollo Global Management, saying there was a 90% probability the U.S. will fall into a 'Voluntary Trade Reset Recession.' Trump Offers Automakers Tariff Reprieve—Latest Big Tariff Flip-Flop Since 'Liberation Day' (Forbes) Key Inflation Measure Slowed To Multiyear Low In March—But Tariff Bump On The Horizon (Forbes) U.S. Economy Shrank During 2025's First Quarter As GDP Slipped 0.3% (Forbes)
Yahoo
23-04-2025
- Business
- Yahoo
Why a top economist thinks the odds of a tariff-fueled recession have climbed to 90%
The risk of a recession this year has spiked to 90%, according to Apollo's Torsten Sløk. That's because tariffs could result in a big blow to small businesses, a major pillar of the economy. Trump's current tariffs could end up impacting 4 percentage points of GDP, Sløk estimated in a note. There's a simple reason tariffs have made a US recession highly likely, according to Apollo Global Management's top economist. That's because the impact on small businesses—a pillar of the US economy—is set to be high, Torsten Sløk said. The import duties Trump has imposed on other nations could significantly impact growth, Sløk said in a note to clients over the weekend. Apollo estimates that the tariffs could shave as much as four percentage points from US GDP, basing its estimates on the hit to US growth when Trump first imposed tariffs on China in 2018. "Tariffs have been implemented in a way that has not been effective, and there is now a 90% chance of what can be called a Voluntary Trade Reset Recession," Sløk wrote. "Small businesses that have for decades relied on a stable US system will have to adjust immediately and do not have the working capital to pay tariffs. Expect ships to sit offshore, orders to be canceled, and well-run generational retailers to file for bankruptcy," Sløk said. He pointed to several signs that a slowdown in small businesses could wind up being a major hit to the economy. For one, small firms account for most of the employment in the US. As of January, businesses with fewer than 500 workers accounted for around 110 million jobs. That's about four times the employment accounted for by businesses with more than 500 employees, Apollo's analysis shows. Small businesses also account for more investment than large-cap firms. US private fixed investment clocked in around $4.2 trillion in the first quarter of 2024, according to data from the Bureau of Economic Analysis. That compares to capital expenditures spending among S&P 500 companies, which hovered around $1 trillion that quarter, per Apollo's analysis. Smaller companies have also accounted for a larger share of GDP in the past. In 2014, the most recent year data was available, small businesses accounted for $5.9 trillion in GDP, or 44% of the total share. "The bottom line: if the current level of tariffs continues, a sharp slowdown in the US economy is coming," Sløk said. Small businesses are already bracing for pain stemming from tariffs, given that most economists say tariffs could result in price increases for US consumers. In March, two-thirds of small businesses said they expected to be hurt by tariffs and other trade issues, according to one Vistage Worldwide survey conducted for the Wall Street Journal. Read the original article on Business Insider
