GDP Decline Marks a Rocky Start
The U.S. GDP data for the first quarter of the year has just been released — or rather, the data for GDP decline, since the economy shrank by -0.3%, as shown in this chart from Yahoo! Finance.
Tariffs or Biden — Who’s to Blame?
According to Trump, the tariffs are not to blame. Instead, he points the finger at… Biden! (What a surprise 😄).
At the same time, he’s asking people to be patient, claiming that the economy will take off strongly in the future, thanks in part to his tariffs.
In the previous quarter (Q4 2024), the U.S. economy had grown by +2.4%.
Trump officially took office as President on January 20th, 2025.
It’s true that it may be too early to draw firm conclusions, but most economists and experts agree that the tariffs were a major misstep.
Even Allies Aren’t Convinced
Even Elon Musk, one of Trump’s usual allies, has been highly critical of them from the start.
That said, Trump himself may not have been fully convinced either — since right after announcing the tariffs, he began backtracking, offering temporary exemptions, postponing them, or removing certain products from the list altogether.
This shows it may have been more of a strategic move to force more favorable negotiations for the U.S.
Or perhaps an attempt to pressure the Federal Reserve into lowering interest rates — which he hasn’t succeeded in doing yet.
Some speculate this is part of a broader goal to refinance the U.S.’s massive debt, especially the portion coming due soon.
Uncertainty Hurts
Whatever the case, one thing is clear: sowing uncertainty in the economy, as Trump is doing, is not good — at least in the short term.
We’ll have to see if his strategies pay off in the medium term and whether he delivers on his promises (because at some point, he won’t be able to blame Biden anymore — or maybe he will, since for Trump the blame always lies elsewhere, as most politicians do).