U.S. gross domestic product (GDP) shrank during the first quarter of 2025 as a surge of imports ahead of President Trump’s tariffs took a bite out of economic growth calculations.
U.S. GDP fell at an annualized rate of 0.3 percent during the first three months of the year, according to data released Wednesday by the Commerce Department, down from an annualized increase of 2.4 percent in the fourth quarter of 2024.
Economists had expected U.S. GDP to fall amid a steep increase in orders of foreign products, which could be far more expensive once Trump’s full slate of tariffs take effect.
“The drop seems to be wholly due to tariff-related distortions,” wrote economists at Pantheon Macroeconomics in a Tuesday preview of the report.
“GDP likely would have risen in the absence of the dramatic shift in policy. Underlying momentum in growth was undoubtedly waning before the tariff shock, though, and in its aftermath we now expect activity to stagnate this year.”
Developing
