[Text/Observer Network Chen Sijia] Local time on April 30, the data released by the U.S. Department of Commerce showed that the U.S. GDP for the first quarter of 2025 contracted by 0.3% on an annualized basis compared to the previous quarter, marking the first contraction since the second quarter of 2022.
Politico reported on April 30 that Trump's tariff policies were one of the main factors hindering economic growth, forcing American companies to stockpile foreign goods before the tariffs took effect, resulting in the U.S. trade deficit in commodities reaching a record high in March, which dragged down GDP growth. Economic experts直言that tariffs would bring "hellish consequences" to the U.S. economy.
The article noted that out of concern for Trump's trade barriers, American businesses scrambled to import foreign goods in the first three months of this year. According to data released by the U.S. Census Bureau, the U.S. trade deficit in commodities widened by 9.6% to $162 billion in March, the highest level on record. Since trade deficits are subtracted from GDP, this had a negative impact on the U.S. economic data.
Arthur Laffer, an informal advisor to Trump during his first term and an American economist, said: "Tariffs will bring hellish consequences. I don't know where Trump thinks things should go, I don't know what he plans to do. I really hope he can significantly reduce tariffs."
Former U.S. Treasury Secretary Yellen also warned that Trump's tariffs would hit enterprises dependent on China's critical mineral supplies, having "extremely adverse" effects on the U.S. economy. She told the Financial Times: "The tariff policy will have extremely adverse consequences for the U.S., consumers, and enterprises dependent on imported inputs. While I cannot say I predict an economic recession, it is certain that the likelihood has greatly increased."
Yellen said: "We are highly reliant on imports from China for most of the critical minerals used in clean energy technologies, batteries, etc. I think imposing huge tariffs on these goods could hinder promising industries."
Consumers' views of the U.S. economy have become increasingly pessimistic. The monthly survey report issued by the Conference Board showed that market expectations were at their lowest level since 2011. Some Republican donors on Wall Street, such as Ken Griffin, founder of hedge fund Citadel Investment, also warned that Trump's tariff policies might undermine the foundation of the U.S. market.
"Every day after Trump's 'Liberation Day,' it becomes increasingly difficult to fully restore market sentiment," said Tim Quinlan, senior economist at Wells Fargo. "It's like trust. Building it takes a lifetime, but destroying it takes just a moment."
New York City Red Hook Container Terminal on April 30, Visual China
The data released by the U.S. Department of Commerce's Bureau of Economic Analysis on April 30 showed that the U.S. GDP for the first quarter of 2025 contracted by 0.3% on an annualized basis compared to the previous quarter, exceeding expectations, marking the first contraction since the second quarter of 2022. In contrast, in the last complete quarter under the administration of former President Biden, i.e., the fourth quarter of last year, the U.S. GDP grew by 2.4% on an annualized basis compared to the previous quarter.
In response to the unfavorable economic data, Trump was quick to blame Biden. He posted on his self-created social platform "Truth Social": "This stock market performance is what Biden left behind, not Trump's. I didn't take over until January 20. Tariff measures will soon start to take effect, and a large number of companies are starting to move into the U.S. in record numbers. Our country will thrive, but we must get rid of the 'adverse effects' brought by Biden."
White House officials insisted that stronger-than-expected consumer spending and private investment partially offset the economic contraction, keeping the U.S. economic foundation stable, which temporarily dispelled concerns about a recession. Trump's senior trade advisor Peter Navarro called it "the best negative GDP data I've ever seen in my life."
The data from the U.S. Department of Commerce showed that the real final sales to domestic purchasers in the U.S. increased by 3% in the first quarter, a figure mainly used to measure consumer spending and private investment, indicating strong demand. However, Politico pointed out that if rising import costs lead to price increases or U.S. companies begin layoffs, this figure may decline in the coming months.
The high tariffs imposed by Trump and the uncertainty of his policies have disrupted the hiring plans of American businesses. A quarterly survey report by the Business Roundtable, an American business organization, on the CEOs of large enterprises showed a sharp drop in the number of U.S. companies likely to expand their workforce in the next six months.
Brett Ryan, senior economist at Deutsche Bank Securities, said: "We have found in the past that trade uncertainty has suppressed companies' capital expenditure and hiring. Slower hiring means slower income growth."
Ryan also pointed out that since Trump has yet to fulfill his campaign promise of tax cuts, the negative impact of the "trade war" on the U.S. economy may weaken public support for him. "Our initial thought at the beginning of the year was that his tax policies could offset the negative impact of trade policies. This idea has been overturned."
Douglas Holtz-Eakin, head of the conservative think tank American Action Forum, said: "There is no good news on the economy. Since he ran on this as his main agenda, he will encounter problems."
A White House advisor also warned that Trump's tariff policies might cause greater "political damage" due to the public's sensitivity to commodity prices and supply. "These things will provoke potential reactions. But it's too late to back down now, as they say, he has made up his mind."
Politico commented that the economic data for the first quarter was far from the "prosperity" expected by Trump and his allies before they came to power. "President Trump promised that his second term would mark the beginning of a new golden age for the United States, but the early economic data looks more like tin alloy."
This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7499442764657066508/
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