Trump casts blame as US economy shrinks in first quarter
Donald Trump has put his own spin on new data showing the US economy has gone backwards in the first months of his chaotic administration.
Gross domestic product shrank 0.3 per cent in the first quarter of 2025, which was worse than economists had expected and the worst quarter since 2022, new analysis reveals.
It was a dramatic reversal of the 2.4 per cent growth in the final months of last year, and solid growth for the past three years.
The figures were released by the Commerce Department’s Bureau of Economic Analysis on Wednesday (US time), and have heightened fears of a US recession.
The report showed the US economy contracted in the first quarter, largely driven by a surge in imports as businesses sought to avoid Trump’s high tariffs.
Trump immediately sought to blame his predecessor, Joe Biden.
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“This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th,” he wrote on Truth Social.
“Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers.
“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, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”
Trump’s press secretary Karoline Leavitt said “the leftovers of Biden’s economic disaster” had been a drag on economic growth.
She said Trump’s decisions were fuelling an “economic boom” and “setting the stage for unprecedented growth” as he ushered in the “new Golden Age.”
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In response, former president Joe Biden’s spokesman told CBS News that under Trump, the US was “plummeting toward a Trumpcession”.
He said Biden had handed Trump the “best-performing economy in the world”, which he had sent into a “nosedive in 100 days”.
The economic report coincided with Trump’s first 100 days in office, and amid growing voter disapproval of his handling of the economy so far.
Trump swept to victory last November on voter angst over the economy, especially inflation.
Consumer confidence is near five-year lows and business sentiment has tanked.
Airlines have pulled their 2025 financial forecasts, citing uncertainty over spending on non-essential travel because of tariffs, which economists have warned will raise costs for companies and households.
Given that an unusually large amount of non-monetary gold had accounted for some of the jump in imports, some economists warned against placing too much weight on the GDP number.
Others argued that the data did not change the narrative of an economy struggling because of uncertainty due to tariffs.
Inflation picked up last quarter and is expected to rise further through the year. Economists expect the Federal Reserve to resume cutting interest rates at some point this year.
Trump on Tuesday softened the blow of his auto tariffs through an executive order mixing credits with relief from other levies on parts and materials.
A 145 per cent tariff on Chinese goods, which unleashed a trade war between Washington and Beijing, remains in place, as does an array of other import duties.
Trump sees tariffs as a tool to raise revenue to offset his promised tax cuts and to revive a long-declining US industrial base.
