According to a report by the Associated Press on April 30, affected by President Trump's trade war that disrupted business activities, the U.S. economy contracted at an annual rate of 0.3% in the first quarter, marking the first decline in three years. This was due to American businesses importing large quantities of foreign goods before Trump imposed heavy tariffs, causing imports to surge.

Economic growth "came to a sudden halt."

The decline in U.S. GDP in the first quarter reversed the trend of a 2.4% increase in the fourth quarter of 2024. The import growth rate reached 41% in the first quarter, the fastest pace since 2020, dragging down the quarterly economic growth rate by 5 percentage points. Consumer spending also slowed significantly, dropping from 4% in the previous quarter to 1.8% in the first quarter. Federal government spending plummeted by 5.1% in the first quarter.

This news triggered fluctuations in financial markets. On April 30, the Dow Jones Industrial Average opened with a drop of 400 points, the S&P 500 index fell by 1.5%, and the Nasdaq Composite Index dropped by 2%.

The surge in imports may reverse in the second quarter, alleviating pressure on GDP. However, many economists say that Trump's heavy tariffs and their erratic imposition will damage the U.S. economic growth in the second half of the year, and the risk of recession is rising.

According to a report by Spain's El País on April 30, due to the trade war and the distrust and uncertainty caused by Trump's policies, the U.S. GDP declined in the first quarter.

Before Trump took office, the world's largest economy was continuously expanding. Trump's unpredictable economic and trade policies have caused distrust and uncertainty and brought this country's enviable economic growth to an abrupt end.

Trump has been inconsistent on tariff issues, flip-flopping and initiating a trade war worldwide, causing significant distortions in the behavior of many economic entities and accelerating U.S. imports, which is the reason for the sudden change in the U.S. economic situation.

Data released by the Bureau of Economic Analysis under the U.S. Department of Commerce on April 30 showed that the U.S. GDP contracted at an annualized rate of 0.3% in the first quarter. This is just the initial estimate, and there will be two more revisions in the next two months.

This is the first decline in U.S. GDP since early 2022.

Trump's economic protectionism aims to reduce trade deficits, but so far the result has been a record-high surge in trade deficits. Companies and consumers have pre-purchased abroad in anticipation of increased import taxes. According to data from the U.S. Census Bureau, this led to a trade deficit of $464.475 billion in the first three months of the year, an unprecedented number that is dragging down U.S. GDP.

The risk of economic recession is approaching.

According to a report by the Nikkei Asian Review website on May 1, the negative growth of U.S. GDP in the first quarter, after three years, has heightened market concerns about the possibility of the U.S. economy falling into recession. On April 30, the Dow Jones Industrial Average fell by 781 points during trading.

Scott Elfstein, head of investment strategy at U.S. asset management company Global X, pointed out that this is equivalent to the "canary in the coal mine" for the Trump administration.

One reason for the negative growth of U.S. GDP is that companies have increased imports ahead of Trump's tariff policies, resulting in a negative net export figure.

Chris Lapuke, chief economist at FWD Bonds, said: "Trump's foolish tariff policy is pushing the U.S. economy to the brink of collapse."

According to a report by Foreign Policy magazine's website on April 30, the latest economic data may further increase uncertainty for investors and businesses and exacerbate concerns about a recession. Due to the Trump administration's heavy tariffs on many countries, especially China, the U.S. economy has been shrouded in the shadow of recession. After the U.S. Commerce Department released the first-quarter economic report on April 30, the stock market fell accordingly.

The data in this report contrasts sharply with the strong growth of the U.S. economy at the end of 2024. Democratic lawmakers quickly seized upon this to criticize the Trump administration's economic agenda.

Representative Ro Khanna, in an interview with Fox News Channel, said: "These policies currently in place simply don't work." Senator Charles Schumer stated in a statement that Trump needs to "admit failure, change course, and immediately dismiss his economic team." (Translated by Lin Zhaohui, Wu Mei, Liu Lifu, and Liu Lin)

Original article: https://www.toutiao.com/article/7499773198813135401/

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