Tom Howell, Jr. | April 30, 2025

(The Washington Times) — The U.S. economy shrank in the first quarter of the year, a sign that President Trump’s aggressive trade tactics are starting to impact businesses.

The Commerce Department report on gross domestic product found a 0.3% contraction, compared to 2.4% growth in the previous quarter.

Wall Street estimates had expected 0.4% growth for the quarter, so the report may fuel recession concerns. A recession is a period of economic and industrial decline generally defined as a fall in GDP in two consecutive quarters.

The GDP report reflects goods and services from January to March.

The report did not capture the “Liberation Day” tariffs that Mr. Trump announced at the start of April. He paused many of them a week later, though hefty levies on China remain.

However, the GDP report period covers some of the tariffs Mr. Trump imposed earlier in the year, and consumer sentiment is down in recent surveys.

Government analysts pointed to a large uptick in imports as companies tried to get ahead of Mr. Trump’s sweeping tariffs. Imports subtract from GDP, so the trend may not weigh on growth in future quarters.

“Compared to the fourth quarter, the downturn in real GDP in the first quarter reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending that were partly offset by upturns in investment and exports,” the report said.