US economy hit import surge, shrinks in Trump’s first 100 days | World News

The US economy contracted in the first quarter of 2025, shrinking at a 0.3 per cent annualised rate as businesses rushed to import goods ahead of rising costs driven tariffs, according to government data released Wednesday.
The Commerce Department’s Bureau of Economic Analysis said in its advance estimate that gross domestic product (GDP) fell for the first time since the pandemic rebound, following 2.4 per cent growth in the fourth quarter. The figure sharply missed economs’ expectations of a 0.3 per cent increase, as projected in a Reuters poll. The downgrade came after Tuesday’s data revealed a record goods trade deficit in March due to surging imports.
According to Reuters, the report “likely grossly exaggerated the economy’s dimming prospects,” as consumer spending still expanded, though moderately. However, the timing—coinciding with President Donald Trump’s first 100 days in office—has amplified public criticism of his handling of the economy.
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However, Trump claimed that the contraction had nothing to do with his tariff wars and predicted the economy would boom when tariffs kicked in.
“When the boom begins, it will be like no other. BE PATIENT!!!” Trump wrote in a social media post.

Trump, who campaigned on economic nationalism and promised to revive US manufacturing, has leaned heavily on tariffs as a central tool of his economic agenda. A 145 per cent tariff on Chinese goods remains in place, alongside other levies on imports from multiple countries. While the adminration argues that tariffs raise revenue and protect American industry, Reuters noted that “consumer confidence is near five-year lows and business sentiment has tanked.”Story continues below this ad
Airlines have pulled their 2025 financial guidance, citing uncertain demand for travel amid rising costs. Inflation also picked up during the quarter and is projected to accelerate through the year, leading many economs to predict that the Federal Reserve may resume interest rate cuts in the coming months.

Reuters added that “some economs warned against placing too much weight on the GDP number,” citing a one-off jump in imports of non-monetary gold, but others said the data points a broader trend: a fragile economy weighed down tariff-induced uncertainty.
In an attempt to temper the fallout, Trump issued an executive order on Tuesday that combines tariff relief on certain auto parts with new credits. Still, the broader trade policy stance remains unchanged.
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