The US economy contracted by 0.5% in Q1 2025, revised down from 0.2%, mainly due to lower consumer spending and exports impacted by a surge in imports following President Trump's tariffs. The import surge saw a record increase of 37.9%, heavily affecting GDP. While economists project a rebound in the second quarter with expected growth of 3%, the uncertainty surrounding upcoming tariffs and ongoing trade negotiations continues to loom over the economy. Recent shifts in global trade alliances further complicate the landscape as countries seek new markets.
The US economy contracted more than previously estimated, with real GDP falling by 0.5% in the first quarter of 2025, as consumer spending and exports declined.
The import surge due to Trump’s tariffs led businesses to stockpile goods, contributing to a GDP decline nearly 4.7 percentage points, marking the fastest import pace since 2020.
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