GDP Report Reveals U.S. Economy Shrank Amid Trump's Tariff Moves

What Happened?

The U.S. economy experienced its worst quarter since 2022 as President Donald Trump’s moves on tariffs continue to shake up markets.

GDP estimates by the Bureau of Economic Analysis (BEA) unveiled that gross domestic product, which measures all U.S. goods and services, registered at an annualized rate of -0.3% in the first quarter.

Wednesday's report marks the first decline in three years and a much worse expectation than the 0.8% rate economists projected, according to CNN.

The BEA said the decrease in real GDP reflected an increase in imports and a decrease in government spending.

'These movements were partly offset by increases in investment, consumer spending, and exports,' the agency added.

The U.S. stock market dropped Wednesday following the release of the report as President Trump pointed the finger at the previous administration.

'This is Biden’s stock market, not Trump’s. I didn’t take over until January 20th,' Trump said on Truth Social. 'Tariffs will soon start kicking in, and companies are starting to move into the U.S.A. in record numbers.'

Trump adds that the U.S. economy will 'boom' once his administration can 'get rid of the Biden overhang.'

'This will take a while,' he added. 'Has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers.'

Why it Matters

The report comes as Trump aimed to highlight new U.S. corporate investments and celebrate his 100th day in office.

Over $5 trillion has been secured in this U.S.-based initiative which aims to create more than 451,000 new jobs to fuel America's future.

But the latest economic report highlights a different current U.S. outlook.

The White House recently blasted e-commerce giant Amazon, Tuesday, over reports it considered plans to display import charges to customers.

Press Secretary, Karoline Leavitt, responded swiftly to accuse Amazon of committing a 'hostile and political act.'

Amazon reportedly denied the report following backlash from President Trump, saying the plan 'was never approved and not going to happen.'

Other major retailers are also currently enduring trade impacts.

Some have already implemented price increases and have cut back on paid advertising.

The ongoing feud between the U.S. and China has been a huge factor in the matter.

Trump recently stated the U.S. and China are in talks to strike a deal, despite China's consistent denial that discussions are active.

The Trump administration claims 200 tariff deals have been made and expects negotiations to conclude in three to four weeks.

How it Affects You

These lingering effects on the economy have caused consumer confidence to slump.

Counter-responses from countries like China have significantly spiked 2025 recession concerns.

The U.S. still holds a baseline rate of 145% on Chinese imports, while China levies remain at 125% on U.S. imports.

Although Trump suspended universal tariffs for 90 days, excluding China, top retailers have sounded the alarm over higher costs to impact consumers.

Experts are closely monitoring what China, and the U.S. decide next, to avoid another economic downturn experienced in 2020.