The Gross Domestic Product (GDP) of the United States economy experienced a significant decline of 0.3% in the first quarter of this year.
The US Commerce Department’s Bureau of Economic Analysis (BEA)in a statement on Wednesday announced that the country’s GDP had fallen by 0.3% in the period from January to March. The contraction was the first since the first quarter of 2022, where the US economy shrank by 1%.
The drop in the country’s GDP comes shortly after the American president, Donald Trump’s self-described “Liberation Day”, which saw him slap tariffs on almost every country on earth.
Sky News Business presenter Darren McCaffrey said most economists are now “effectively expecting a recession this year in the United States”.
He added: “That is not good news for Donald Trump.” Economists from the International Monetary Fund (IMF) had predicted an economic slowdown as a result of Washington’s tariffs.
“We expect that the sharp increase on April 2 in both tariffs and uncertainty will lead to a significant slowdown in global growth in the near term”, the foreword of the IMF’s World Economic Outlook report released on April 18 said.
In a post on Truth Social shortly after the announcement about the US economy shrinking, President Trump blamed his predecessor and dismissed notions that his tariffs had contributed. He wrote: “This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th. 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!!!”
President Trump announced a 34% tariff on China on April 2, however the import taxes have now risen to 145%. China has imposed a 125% tariff on the US.
European Central Bank policymaker Piero Cipollone warned that in a worst-case scenario, the trade war between Beijing and the White House could lower global output by 9%.