The US economy contracts in the first quarter of the Trump administration.
US GDP falls 0.3% year-on-year in the first three months of the year
BarcelonaThe US economy entered a negative period in the first quarter of Donald Trump's administration. According to provisional data provided by the Department of Commerce's Bureau of Economic Analysis, the country's GDP fell 0.3% year-on-year—0.1% if we look at data for the fourth quarter of 2024—between January and March 2025. The economic contraction is driven by the administration's new economic policies. It is worth noting that Trump's announcement of reciprocal tariffs—released in early April—has had no impact on this period. The February tariffs, aimed at squeezing China, Canada, and Mexico, did.
According to the published data, there are two key factors to understanding the decline. On the one hand, a sharp increase in imports—spurred by tariff risk—and on the other, a reduction in government investment. Consumer spending, which grew 1.8% in the first quarter, also fell below the level of the previous six months. The GDP decline is the first in three years and comes as a surprise: forecasts, while predicting a decline, remained more optimistic.
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