U.S. GDP Drops 0.3% in Q1 2025—Trump-Era Policies Still Casting Long Shadow

Another quarter, another contraction—Washington’s economic playbook shows its age as GDP slips for the third consecutive month.

Behind the numbers: While the administration spins this as ’transitory turbulence,’ analysts spot worrying parallels to 2019’s manufacturing slump. The ’Art of the Deal’ meets the reality of supply chain math.

Silver lining? Crypto markets barely blinked—Bitcoin hovered near $65K as traders shrugged off another ’legacy finance’ speed bump.

In Brief

• The US economy declined by -0.3% in Q1, affected by Trump’s tariff policies.
• Despite signs of weakness, economists consider that a recession is not yet confirmed.

An Economy Destabilized by Trump’s Policy

It’s a fact! Theof President Donald Trump is causing a real shockwave (and not just in the United States!). In only a few months, his tariff decisions have:

• worsened the trade deficit;
• disrupted trade exchanges;
• weakened growth.

the inflation-adjusted GDP dropped by -0.3%. This figure is well below the 0.8% forecast.

According to the Department of Commerce, this drop mainly results from an explosion of imports (+41.3%) aimed at anticipating tariff increases. Upstream, exports grew by only 1.8%. This dynamic endangers.

According to a report:

The difference between imports and exports has decreased the GDP the most since 1947.

A key engine of the economy, consumption has also slowed down significantly. Specifically, it fell to 1.8% (compared to 4% previously). Public spending aggravated the trend. It dropped by -5.1%.

Having said that, corporate investments rebounded by 9.8%. Some analysts interpret this as anticipation of.

Recession or Simply an Economic Slowdown?

Certainly, theis not yet enough to qualify the situation as a technical recession. The fact is it requires two consecutive quarters of contraction. Nonetheless, the signals are worrisome.

Reference is notably made to the unemployment rate which remains low: 4.2%. Added to this is underlying demand, measured by final sales to private buyers, which is slightly increasing.

However, as explained by Gregory Daco, economist at Ernst & Young, theis considerably exposed to a risk of marked slowdown (especially if tariffs remain unchanged!). The coming months will therefore be decisive.

The specter of a recession is not yet a certainty. However, the fundamentals of the American economy are eroding. Investors and analysts remain attentive to the evolution of Trump’s economic policy amid increasing instability!

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