The American economy recorded the worst quarterly performance since 2022, with 0.3 % contraction in the first quarter of 2025. The result, which was issued by the Ministry of Commerce, surprised the analysts, who expected 0.3 % growth in this period.
A Decreased GDP (GDP) America is mainly attributed to the changes implemented by Donald Trump in the country’s commercial and financial policy. Consumption, the main engine of the American economy, was strongly affected by the concerns of the population regarding the “tariff” imposed by the Republic.
The United States government realized the impact of low population spending rates in the first three months of the year. Consumer confidence has reached the smallest level since the Covid-19s, which directly affects the result of GDP.
While consumers reduced their expenses, companies have increased their imports and preparation to increase rates. Foreign products purchases grew 41 % in this period, and expand the American trade deficit.
Market reaction and views
Trump tried to stay away from the economic fall, but he admitted that the definitions would affect consumption and prices of Americans. The president has strengthened his desire to negotiate with Chinese leader Xi Jinping, while highlighting the bad performance of Chinese industrial activity in April.
Economists indicate this American companies are concerned And I tried to expect the stock to the fullest. The change in import and storage patterns indicates that despite the general support of some of Trump’s entrepreneurs, there is a great fear of the country’s economic future.
The Federal Reserve (Fed) is now facing the challenge of balancing its decisions on interest rates in the face of this new scenario. with Inflation moves away from the goal 2 % and reach 3.6 %, the US Central Bank can be forced to reconsider the monetary policy strategy in the coming months.