The US GDP declined in the first quarter of 2025.. and Trump blames Biden.
Data from the US Department of Commerce revealed on Wednesday, April 30, a 0.3% decline in the country's Gross Domestic Product (GDP) during the first quarter of 2025, surpassing analysts' expectations of a projected 0.4% growth. This contraction came as a surprise after a 2.4% growth in the fourth quarter of 2024.
US President Donald Trump was quick to blame his predecessor Joe Biden, considering the economic downturn a result of "Biden's cumulative impact." He stated on his platform "Truth Social": "This is Biden's stock market, not Trump's market... We need to get rid of Biden's burden," affirming that his trade policies will have a positive long-term impact.
However, economists attributed the decline to other factors, notably the significant 41.3% jump in imports on an annual basis, which is deducted from the GDP.
Experts believe that companies and consumers rushed to increase purchases before Trump's announced tariffs took effect in April, leading to a 50.9% inflation in imports in the goods sector alone.
Economic analysts also criticized the impact of fluctuating trade policies on the economy, with Nobel laureate economist Joseph Stiglitz stating: "No one can look at what's happening in the economy without saying that fluctuating tariffs _ imposed and then lifted _ do not affect the economic situation."
On the other hand, Mark Zachary Taylor, an expert in US presidential policies at the Georgia Institute of Technology, pointed out that the rise in imports "perfectly matches what one would expect from millions of American companies and households trying to anticipate imminent tariff increases," noting that these actions also contributed to the stock market decline and the weakening of the dollar.
Unlike previous presidents like Franklin Roosevelt, Ronald Reagan, and Barack Obama, who acted swiftly to address economic crises, analysts believe that the impact of Trump's policies was "sharp and rapid" compared to the usual gradual changes. The sharp increase in imports is the highest since 1972, excluding the COVID-19 pandemic period, reflecting the private sector's response to the new trade measures.
This decline is the first since the first quarter of 2022, which saw the only contraction during Biden's term. While Trump believes that economic improvement will take time, experts warn that continued uncertainty about policies may prolong current economic challenges.
