U.S. Economy Shrinks 0.3% in First Quarter; Trump Blames Biden ‘Overhang’

by Emmitt Barry, Worthy News Correspondent

(Worthy News) – The U.S. economy contracted by 0.3% in the first quarter of 2025, marking its first decline in three years, according to preliminary data released Wednesday by the Commerce Department.

The drop, far below the expected 0.4% growth, raised concerns of a slowdown amid a volatile trade environment shaped by President Trump’s sweeping tariff agenda. “The downturn in real GDP… reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending,” the department said.

Much of the import surge came as businesses and consumers rushed to stockpile goods before Trump’s tariffs, announced in March, took effect on April 2. Imports jumped at an annualized rate of 41.3%.

Trump, marking his 101st day back in office, blamed the decline on his predecessor. “This is Biden’s Stock Market, not Trump’s,” he posted on Truth Social. “Our Country will boom, but we have to get rid of the Biden ‘Overhang.’”

The White House echoed this view, calling GDP a “backward-looking indicator” and pointing to “strong momentum” under Trump. Press Secretary Karoline Leavitt said, “It’s no surprise the leftovers of Biden’s economic disaster have been a drag.”

Meanwhile, Democrats were quick to assign blame. “This decline in GDP is a blaring warning… the failed MAGA experiment is killing our economy,” said Senate Majority Leader Chuck Schumer.

China, a main target of the new tariffs, has responded with retaliatory levies. At a cabinet meeting Wednesday, Trump said Beijing was getting “hammered,” and dismissed concerns over higher consumer prices. “Maybe the children will have two dolls instead of 30 dolls,” he quipped.

Economists at Wells Fargo cautioned that while the contraction raises recession risks, it does not yet signal a downturn. “It reflects… the biggest drag from net exports in data going back more than a half-century,” they wrote.

Latest Worthy News