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Agence France-Presse

The US economy unexpectedly contracted in the first three months of the year on an import surge triggered by Donald Trump’s tariff plans, although the president pinned the blame squarely on his predecessor.
The sharp increase in imports was a reflection of businesses and consumers stockpiling foreign goods to get ahead of Trump’s sweeping trade levies, which went into effect earlier this month.
All three major Wall Street indices fell on the economic news, before paring losses to close mixed, while oil prices extended their losses.
At a cabinet meeting in Washington, Trump insisted the growth downturn was the legacy of former president Joe Biden’s policies.

“That’s Biden, that’s not Trump,” he said.
Striking a more positive tone, he highlighted the “whopping” 22 per cent rise in gross domestic investment during the first quarter.
Annual economic growth stayed above 2 per cent in every year of Biden’s presidency, reaching 2.8 per cent in 2024.
The gross domestic product (GDP) of the world’s largest economy decreased at an annual rate of 0.3 per cent in the first quarter, after growing 2.4 per cent in the final months of 2024, according to Wednesday’s first estimate from the US Commerce Department.
This was sharply below the market consensus estimate of 0.4 per cent growth, according to Briefing.com, and marked the first quarterly contraction since 2022.
The Commerce Department said in a statement that the contraction was in large part down to an “upturn in imports”, aided by a decline in consumer and government spending.


In a statement, the White House called GDP a “backward-looking indicator”.
“It’s no surprise the leftovers of Biden’s economic disaster have been a drag on economic growth,” White House Press Secretary Karoline Leavitt said.
“But the underlying numbers tell the real story of the strong momentum President Trump is delivering.”
The GDP figures were published on the 101st day since Trump returned to White House, along with fresh data showing a slowdown in the US Federal Reserve’s favoured inflation gauge last month.
Trump’s introduction of sweeping tariffs against most countries sparked a sell-off in financial markets, sending volatility to levels not seen since the Covid pandemic.
“This decline in GDP is a blaring warning to everyone that Donald Trump and Congressional Republicans’ failed Maga [Make America Great Again] experiment is killing our economy,” top Senate Democrat Chuck Schumer said in a statement.




Following the dramatic market movements in early April, the Trump administration announced a 90-day pause on the higher tariffs for dozens of countries to allow for trade talks, while maintaining a baseline 10 per cent rate for most countries.
But the administration has also added to the tariffs on China, with the level of duties introduced since January now totalling 145 per cent – with some sector-specific measures pushing levies even higher.
Beijing has responded with its own steep, targeted measures against US goods.
At the cabinet meeting on Wednesday, Trump said China was getting “hammered” by the tariffs, and said he still hoped to make a deal with Beijing, whom he referred to as “the leading candidate for the chief ripper-offer” of America.
“Maybe the children will have two dolls instead of 30 dolls,” Trump said, arguing that the United States did not need many of the things China produced.
“And maybe the two dolls will cost a couple of bucks more than they would normally,” he said.
Economists at Wells Fargo wrote in an investor note that the US economy is at a greater risk of recession now than a month ago, “but this 0.3 per cent contraction in Q1 GDP is not the start of one.”
“It reflects instead the sudden change in trade policy that culminated in the biggest drag from net exports in data going back more than a half-century.”


The US is fixated on ‘beating China’. It needs to stop beating itself

Japan says its US$1 trillion in US Treasuries could be leverage in trade talks

Apple expects US$900 million tariff hit as it shifts US iPhone supply from China to India

Chinese firms in Vietnam halt new investment, face closure if Trump’s tariffs return

Donald Trump

Trump blames Biden after US economy shrinks in first 3 months of his presidency

US President Donald Trump holds a rally in Warren, Michigan, on Tuesday to mark his 100th day in office. Photo: Reuters

US President Donald Trump holds a cabinet meeting at the White House on Wednesday. Photo: Reuters

Wall Street storms back from early losses, concluding a month of Trump chaos

A trader at the New York Stock Exchange on Tuesday. Photo: Reuters

An employee organises grocery at a Publix supermarket in Miami. Photo: EPA-EFE

A trader at the New York Stock Exchange on Wednesday. Photo: Reuters

US Treasury chief not worried about shops running out of items ‘at present’

US Treasury Secretary Scott Bessent outside the White House in Washington on Monday. Photo: EPA-EFE

Trump eases car tariffs burden as Lutnick touts first foreign trade deal

A hoist is shown at an empty Paslin facility on April 23, 2025, in Shelby Township, Michigan. Photo: AP

US President Donald Trump holds a chart next to US Secretary of Commerce Howard Lutnick in the Rose Garden at the White House on April 2. Photo: Reuters

Changes to auto tariffs would provide relief for vehicles assembled in US plants. File photo: TNS

Trump trade war: US consumer confidence hits 5-year low amid tariff concerns

A supermarket shopper walks past a display of eggs in Monterey Park, California. US consumer confidence in April saw its largest monthly decline since the pandemic. Photo: AFP

Trump has worst 100-day returns for US stocks, dollar in 50 years; Hong Kong gets boost

US President Donald Trump in the Oval Office on Tuesday, April 22, 2025. Photo: AP.

A trader on the floor of the New York Stock Exchange (NYSE) on April 16, 2025. Photo: AFP.

A trader rejoicing in front of a board full of advances at a brokerage in the Shanxi provincial capital of Taiyuan in August 2009. Contrary to global conventions, China’s stock exchanges denote gains and advances in red, using the green colour to represent losses and declines. Photo: Reuters.

A trader on the floor of the New York Stock Exchange (NYSE) on April 7, 2025. Photo: AFP.

News

World

United States & Canada

US GDP fell at an annual rate of 0.3 per cent in the first quarter, after growth of 2.4 per cent in the last months of 2024


US GDP fell at an annual rate of 0.3 per cent in the first quarter, after growth of 2.4 per cent in the last months of 2024.
