US economy contracts 0.3% in Q1 2025; Donald Trump blames it on Biden ‘Overhang’

US GDP contracts: The financial information triggered a damaging response in US inventory markets

US GDP contracts: The American economy noticed an sudden contraction through the first quarter of 2025, primarily attributed to elevated imports as companies and people constructed up inventories earlier than US President Donald Trump‘s complete tariffs took impact.
According to figures launched by the US Commerce Department on Wednesday, the GDP of America’s economy declined at an annual charge of 0.3 % in the primary quarter, following a 2.4 % development in the final quarter of 2024. This efficiency fell significantly wanting market expectations, which had predicted a 0.4 % development, as reported by Briefing.com.
“The downturn in real GDP in the first quarter reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending,” the Commerce Department stated in an announcement.
The financial information triggered a damaging response in US inventory markets, with important early declines noticed throughout all three fundamental Wall Street indices.
Blame it on Biden? Trump thinks so!
In a Truth Social platform publish, the US president dismissed claims in regards to the financial downturn, shifting duty to his predecessor Joe Biden.
“This is Biden’s Stock Market, not Trump’s,” the US president wrote in a publish on his Truth Social platform. “Our Country will boom, but we have to get rid of the Biden ‘Overhang.'”
“This will take a while, has NOTHING TO DO WITH TARIFFS,” he stated. “When the boom begins, it will be like no other. BE PATIENT!!!”
Subsequently, in a CNBC interview, Trump’s financial adviser Peter Navarro addressed the GDP decline, attributing it to pre-tariff import actions.
“When you have this import surge that we’ve had to try to get in ahead of the tariffs, that’s dragging down our GDP growth by something like five percent,” he stated. “I mean, it’s just like extraordinary.
“But that is not going to be the case subsequent quarter,” he added.
Since returning to workplace on January 20, the US president has carried out varied tariff measures. In March, he introduced complete tariffs concentrating on main buying and selling companions, scheduled to start in early April, aiming to restructure US commerce relationships. The GDP figures had been launched on his a hundred and first day in workplace.