Tariffs Hit Hard As US Economy Shrinks For First Time Since 2022
The U.S. economy unexpectedly contracted in the first quarter of 2025, posting its first negative growth reading since the second quarter of 2022 as Donald Trump’s newly imposed trade tariffs sent shockwaves through multiple sectors.Gross domestic product declined by 0.3% on an annualized basis during the January–March period, marking a sharp reversal from the 2.4% growth recorded in the final quarter of 2024. The reading fell short of analyst expectations, which had forecast a modest slowdown to 0.4% growth.The decline in real GDP during the first quarter was mainly driven by a surge in imports—subtracted from GDP calculations—and a pullback in government spending. The U.S. economy posted the largest goods trade deficit ever in March, following the second- and third-largest monthly deficits on record in January and February, respectively, as importers accelerated foreign purchases in anticipation of tariffs. At the same time, spending reductions by the Elon Musk-led Department of Government Efficiency (DOGE) contributed further downward pressure on economic output.“These movements were partly offset by increases in investment, consumer spending, and …Full story available on Benzinga.com
