U.S. GDP Falls By 0.3% In Three Months Amid Trump’s Economic Policies
Data confirms it: the US economy has just experienced its worst quarter since 2022. It shows a negative growth of -0.3% in the first quarter. This unexpected GDP decline raises fears of a decisive turning point for markets and investors. Upstream, trade tensions seem to be worsening.

In Brief
- The US economy declined by -0.3% in Q1, affected by Trump’s tariff policies.
- Despite signs of weakness, economists consider that a recession is not yet confirmed.
An Economy Destabilized by Trump’s Policy
It’s a fact! The new economic policy of President Donald Trump is causing a real shockwave (and not just in the United States!). In only a few months, his tariff decisions have:
- worsened the trade deficit;
- disrupted trade exchanges;
- weakened growth.
Result: the inflation-adjusted GDP dropped by -0.3%. This figure is well below the 0.8% forecast.
According to the Department of Commerce, this drop mainly results from an explosion of imports (+41.3%) aimed at anticipating tariff increases. Upstream, exports grew by only 1.8%. This dynamic endangers the balance of world trade.
According to a report :
The difference between imports and exports has decreased the GDP the most since 1947.
A key engine of the economy, consumption has also slowed down significantly. Specifically, it fell to 1.8% (compared to 4% previously). Public spending aggravated the trend. It dropped by -5.1%.
Having said that, corporate investments rebounded by 9.8%. Some analysts interpret this as anticipation of the upcoming inflation.
Recession or Simply an Economic Slowdown?
Certainly, the GDP decline is not yet enough to qualify the situation as a technical recession. The fact is it requires two consecutive quarters of contraction. Nonetheless, the signals are worrisome.
Reference is notably made to the unemployment rate which remains low: 4.2%. Added to this is underlying demand, measured by final sales to private buyers, which is slightly increasing.
However, as explained by Gregory Daco, economist at Ernst & Young, the global economy is considerably exposed to a risk of marked slowdown (especially if tariffs remain unchanged!). The coming months will therefore be decisive.
The specter of a recession is not yet a certainty. However, the fundamentals of the American economy are eroding. Investors and analysts remain attentive to the evolution of Trump’s economic policy amid increasing instability!
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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