By Martim Neves,
Managing Partner
at Full House Partners
In our work at Full House Partners Capital — where every deal is built on conviction and structured for enduring value — we keep our eyes on macroeconomic forces reshaping the landscape for our clients and partners. In 2025, one issue looms especially large: tariffs. The so-called “tariff shock” may have lost headline status, but its impact is only just unfolding. Many investors and business leaders are rightfully asking: Will tariffs choke off U.S. economic growth, or will resilience continue to carry the day?
Here’s the reality: U.S. tariff rates are rising sharply, with average effective rates expected to climb nearly 10 percentage points to around 12%. That’s the sharpest one-year increase since the U.S. Civil War era in 1862. This tectonic policy shift touches every corner of the economy, from cross-border supply chains to everyday consumer choices.
What does this mean for investors and operators? Based on our analysis, the immediate outlook is clear: U.S. economic growth will cool — not collapse. Our forecast calls for a roughly one percentage point slowdown in GDP growth over the next 12 months in response to tariff hikes recently announced in spring 2025. Importantly, we do not see a near-term recession on the horizon.
At Full House Partners Capital, our approach is to read beyond the headlines — relying on both “hard” economic data (such as consumer spending, trade volumes and pricing) and “soft” indicators such as confidence surveys. Today, these two indicators are diverging:
– Consumer Sentiment has slipped near all-time lows, according to the University of Michigan’s latest readings — reflecting uncertainty and concern over geopolitical and trade risks.
– Actual Consumer Spending meanwhile, tells a different story: in the first quarter of 2025, inflation-adjusted spending grew more than 3% year-on-year.
This split signals a U.S. economy that, while cautious, remains fundamentally resilient.
The numbers behind the tariff story are staggering. In 2024, the United States collected roughly $100 billion in tariff revenue. May 2025 alone brought in about $24 billion — nearly a quarter of last year’s total in a single month. If current trends hold, annual tariff collections could jump by approximately $200 billion this year, or about 0.7% of U.S. GDP. That’s a more than threefold increase in the effective tariff burden since 2024.
But how are businesses and consumers responding? The International Monetary Fund’s Portwatch data tells us that, so far, U.S. demand for imported goods is holding steady. Import volumes via U.S. ports in 2025 track in line with historical averages, despite temporary surges and subsequent slowdowns tied to the frontloading of imports ahead of tariff deadlines. Notably, shipments from China increased 6% year-to-date, as firms scrambled to beat higher tariffs.
With heightened tariffs and hundreds of billions in new duties collected, many expected prices for everyday goods to surge. So far, that hasn’t materialized. According to real-time data from PriceStats, consumer prices have actually edged down slightly since January — even as corporations’ tariff costs have literally tripled.
Why the delay? Businesses are absorbing some costs, supply chains are adjusting, and excess inventories built up earlier in the year are helping buffer price shocks. Nonetheless, our view is that U.S. consumer prices will eventually move higher as tariff effects work their way through product cycles.
At Full House Partners Capital, our mission is more than forecasting the business cycle — it’s about structuring opportunities that are resilient, prioritized, and strategically positioned for long-term growth. The current economic environment, resilient but facing crosswinds, demands just that.
– Equities: We see particular strength in sectors geared toward non-cyclical earnings drivers. Technology — particularly artificial intelligence — alongside financials and utilities, is poised to outpace broader indices as the market digests changing global trade dynamics.
– Fixed Income: With today’s rate environment, high-quality bonds offer important recession protection, balancing equity risk and providing income even in a slower growth context.
– Alternatives: Gold, structured products, infrastructure, and hedge funds remain critical risk management tools — helping investors weather volatility that tariffs and other policy uncertainties may produce.
Importantly, as policy noise recedes, investors may be well-served to focus not just on trade talk but on fundamental, long-term growth drivers. At Full House Partners Capital, we see opportunity in the challenges: new markets, new technologies, and new partnerships formed in moments of transformation.
Will tariffs choke economic growth in 2025? Our answer is measured, yet optimistic. Tariffs are a headwind — perhaps the strongest seen in generations. But fundamental demand remains strong, businesses are adapting, and the American consumer continues to surprise with resilience and adaptability.
Ultimately, every challenge brings a new cycle of value creation. As always, our compass remains conviction-driven investing — building with vision, structuring for impact, and ensuring every opportunity, even in a volatile world, is designed for collaborative, sustainable growth.
We’ll continue to monitor the shifting data, bringing strategic insight and clarity to our clients and partners. Because in our view, every exit is an entry point — for renewed opportunity, sustainable impact, and shared success.
By Martim Neves
Managing Partner
Full House Partners
