US economy hit by import surge, shrinks in Trump’s first 100 days

According to Reuters, the report “likely grossly exaggerated the economy’s dimming prospects,” as consumer spending still expanded, though moderately. However, the timing—coinciding with President Donald Trump’s first 100 days in office—has amplified public criticism of his handling of the economy.

However, Trump claimed that the contraction had nothing to do with his tariff wars and predicted the economy would boom when tariffs kicked in.

“When the boom begins, it will be like no other. BE PATIENT!!!” Trump wrote in a social media post.

Trump, who campaigned on economic nationalism and promised to revive US manufacturing, has leaned heavily on tariffs as a central tool of his economic agenda. A 145 per cent tariff on Chinese goods remains in place, alongside other levies on imports from multiple countries. While the administration argues that tariffs raise revenue and protect American industry, Reuters noted that “consumer confidence is near five-year lows and business sentiment has tanked.”

Airlines have pulled their 2025 financial guidance, citing uncertain demand for travel amid rising costs. Inflation also picked up during the quarter and is projected to accelerate through the year, leading many economists to predict that the Federal Reserve may resume interest rate cuts in the coming months.

Reuters added that “some economists warned against placing too much weight on the GDP number,” citing a one-off jump in imports of non-monetary gold, but others said the data points a broader trend: a fragile economy weighed down by tariff-induced uncertainty.

In an attempt to temper the fallout, Trump issued an executive order on Tuesday that combines tariff relief on certain auto parts with new credits. Still, the broader trade policy stance remains unchanged.