The US economy unexpectedly shrunk in the first quarter of 2025, as a wave of imports, inspired by President Donald Trump’s widespread new tariff, dragged on development, AFP Informed
But the President convicted the former President Joe Biden of sowing the seeds of recession.
Data from the US Department of Commerce contracted GDP at an annual rate of 0.3% between January and March, below the expectations of an increase of 0.4%.
After 2.4% extension in the last month of last year, it marked the first quarter contraction since 2022.
The decline was largely inspired by a sharp increase in imports, as businesses and consumers participated to buy foreign goods ahead of Trump’s tariff hike introduced earlier this month.
The Department of Commerce also cited weak government and consumer expenses.
Despite the amazing recession, Trump blamed the policies of the biden-era for a 22% increase in gross domestic investment “, and the GDP dip.
“It’s biden, it’s not trump,” he said during a cabinet meeting.
The White House echoed the message that the GDP was called a “backward indicator” and insisted that “the inherent numbers are telling the real story of President Trump.”
The markets initially slipped on this news, the three major Wall Street Index fell before it was mixed. Oil prices increased their loss.
The figures arrived at the office on the 101st day of Trump, with new signals to slow inflation, potentially reduced pressure on the Federal Reserve.
The top Senate Democrat Chak Shumar condemned the recession, saying: “This decline in GDP is a blurred warning … unsuccessful Maga experiment is killing our economy.”
Trump recently introduced 10% baseline tariff on most imports, with some duties on Chinese goods now reached 145%.
The White House has prevented the increase in tariffs for 90 days on select countries to allow for trade talks, although Beijing has responded with ventilative measures.
Trump defended his strategy, saying, “Perhaps children will have two dolls instead of 30 dolls.” “And perhaps two dolls will cost a few rupees more.”
Economists at Wales Fargo said that the risk of recession has increased, but the Q1 contraction suddenly reflects trade shock, not widespread recession.
