President Donald Trump’s economic policies have already shrunk the U.S. economy for the first time in three years.
A report released Wednesday by the official U.S. Bureau of Economic Analysis found gross domestic product had contracted last quarter by an annualized rate of 0.3 percent, The Washington Post reported.
It was the first deceleration recorded by the U.S. government agency since early 2022, when the global economy was suffering from supply chain shortages brought on by the COVID-19 pandemic.
This time, the contraction is self-inflicted, according to the Post. Uncertainty over the president’s sweeping tariff policies led to a dramatic increase in imports, which count against the GDP.
The situation was exacerbated by lower government spending, as the federal government canceled hundreds of billions of dollars in contracts and grants. Consumer spending also took a hit, as Americans pulled back on unnecessary purchases amid fears of a potential recession, the Post reported.
“Growth has simply vanished,” Chris Rupkey, chief economist at the financial research firm Fwdbonds, wrote in a note to clients after the report’s release. “Maybe some of this negativity is due to a rush to bring in imports before the tariffs go up, but there is simply no way for policy advisors to sugar-coat this.”
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