Bad tariff policy better than uncertainty, recession may be ahead

NASHVILLE, Tenn. — The 90-day pause on higher reciprocal tariffs on China may provide temporary relief for the equipment finance industry, but the pause may have only exacerbated market uncertainty. 

The United States lowered tariff rates on Chinese imports to 30% from 145% on May 12, roughly one month after announcing a 90-day pause on higher reciprocal tariffs on most nations.  

However, frequent changes to global trade policies are more challenging than the tariffs themselves, Kara Smith, department chair of economics and finance at Nashville’s Belmont University, said during a fireside chat at Equipment Finance Connect 2025. 

“You don’t know what game you’re playing. It’s like going out and playing soccer with a rule change every two minutes. … So that’s, I think, the broader landscape that we should be really concerned about right now.

“… Bad tariff policy is better than an uncertain tariff policy.” 

— Kara Smith, department chair of economics, Belmont University

Equipment shipping via the Port of Los Angeles declined 35% year over year during the first week of May, Smith said, noting this reflects the impact of uncertainty on consumer behavior. 

Moreover, heavy-equipment industry professionals should prepare for a recession based on the economic environment, although the chances of this have recently decreased, she said.  

“As of this week, most forecasters — corporate forecasters, professional forecasters — have moved the chance of recession from above 50% to below 50%,” she said. “So, the average was maybe around 60% previously, and now from 35% to 45%, depending on where you look.  

“But I think you should be operating your businesses as though some of these recessionary impacts will take place at the end of the year.” 

Equipment Finance Connect takes place May 14 and May 15 at JW Marriott Nashville. Follow all the latest news from the event here.