The United States is feeling the economic squeeze as new tariffs start to take a toll on businesses and consumers alike. Recent research from Apollo Global Management highlights a sharp slowdown, attributing much of it to sweeping import tariffs, especially those on goods from China.
Prices are rising and confidence is dropping as companies pass on the increased costs to consumers. Executives from major firms like Southwest Airlines, Chipotle, and PepsiCo have reported signs of a slowdown and heightened caution among consumers.
In response to the uncertain climate, many businesses are cutting back on investment plans and reducing orders for new equipment. Earnings forecasts are being lowered at the fastest rate since 2020, signaling concerns about future demand.
Warehouses are overflowing as companies had rushed to stock up before the tariffs kicked in. With consumer spending slowing down, these inventories are piling up, leading to decreased orders and a dip in the logistics industry. Indicators like truck sales and the Logistics Managers’ Index have also fallen.
Trade between the United States and China has slowed dramatically. Fewer shipping containers are leaving China for U.S. ports, raising fears of empty store shelves and product shortages. The drop in container freight rates underscores the reduced demand for shipping.
American consumers are growing anxious. Confidence has plummeted across all income groups, with many expecting worse business conditions and rising unemployment. Big purchases spiked briefly as some tried to beat price hikes, but spending has since cooled, especially on non-essential items like travel and dining out.
The slowdown isn’t just domestic. International tourism to the U.S. is decreasing, particularly from Europe. Cities that rely heavily on tourists, like Las Vegas, are already seeing fewer visitors and lower hotel occupancy rates.
Financial stress is mounting for many families. There’s an increase in people making only minimum payments on credit cards and a rise in late payments. Even cash purchases of homes are down, indicating caution among wealthier buyers.
Apollo’s analysis warns of potential stagflation—a troubling mix of slow economic growth and rising prices. This scenario poses challenges for policymakers, as stimulating the economy could worsen inflation.
According to the report, there’s now a 50 percent or higher chance of a U.S. recession. The tariffs are not only affecting trade with China but are also straining relationships with Europe and other trading partners.
If these trends continue, Americans might soon face higher prices and fewer products on store shelves, impacting everyday life across the country.
