90% Chance Of Recession Due To Trump's Tariffs: 'Sharp Slowdown' Is Coming, Economist Says

Apollo Global Management, Inc‘s APO chief economist warned on Saturday that the odds of a U.S. recession in 2025 are 90%.

The Details: Torsten Slok predicts the U.S. will fall into what he labelled a "Voluntary Trade Reset Recession.” He attributed the high risk to the economic impact of President Donald Trump's trade and tariff strategies.

Using data from the 2018 U.S.-China trade war, the Apollo economist noted that even a modest increase in tariffs then reduced GDP by 0.25% to 0.7%. Trump's current plan calls for double-digit tariff rates. Slok calculated that this could subtract nearly 4 percentage points from 2025 GDP. This does not include additional negative effects from uncertainty on consumers and corporate decisions.

Other prominent economists and financial institutions see an elevated risk of recession, but none as high as Slok's 90% call. A recent Wall Street Journal survey indicated that economists have raised their estimated likelihood of a recession in the next 12 months to 45%, a significant increase from 22% in January.

JPMorgan & Chase Co. JPM CEO Jamie Dimon, has also predicted a recession as "the likely outcome" due to tariff-related uncertainties.

The Apollo economist said it is "not too late to modify the course." He suggested a 180-day pause on new tariffs, with a 10% rate for countries willing to negotiate towards zero tariffs. He also proposed a gradual phase-in of tariffs on strategic products from China as a possible off-ramp.

"The bottom line: If the current level of tariffs continues, a sharp slowdown in the US economy is coming," Slok wrote.

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