U.S. economic growth declined sharply in the first quarter of 2025 amid President Donald Trump’s sweeping tariff policies.
On Wednesday (April 30), the Commerce Department reported that the nation’s gross domestic product, which is the total value of products and services, shrank at a 0.3 percent annual rate, per CBS News. The economy grew 2.4 percent in the final three months of 2024.
Trump’s first quarter of his second term marks the worst quarterly performance for the economy since 2022 amid recovery from the COVID pandemic.
The slowdown comes amid predictions of Trump’s sweeping tariffs disrupting the economy. The president’s blanket tariffs were announced earlier this month, but businesses rushed to stockpile goods earlier this year to get ahead of import duties.
While some economists are raising the odds of the U.S. going into a recession later this year, others say Wednesday’s report is clouded by the noise of the surge in imports as businesses sought to get ahead of tariffs. The rollout of steep import fees could create trouble for the economy later this year.
“This artificial front-loading of demand sets the stage for a sharper demand cliff in Q2 — a far more troubling phase of the ongoing economic slowdown.” EY chief economist Gregory Daco said in a statement.
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