US GDP drops to 0.3% in Q1; Donald Trump says ‘NOTHING TO DO WITH TARIFFS. Be Patient’

US GDP dropped for the first time in three months to 0.3 per cent in the first quarter of the calendar year 2025 amid Donald Trump's ongoing tariff war between the United States and other nations, according to the U.S. Bureau of Economic Analysis' advance estimates data released on Wednesday, April 30. 

“The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending,” said the government agency in the official release.

The data showed that real GDP dropped to its current levels from 2.4 per cent in the fourth quarter of 2024. The agency cited that the “downturn” in the real GDP was due to the increase in imports into the Western nation.

The report also suggested that the deceleration in consumer spending, along with a downturn in government spending, was offset by the rise in investments and the exports from the United States. 

“This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers. Our Country will boom, but we have to get rid of the Biden ‘Overhang.’ This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!” said President Trump in his post on the social media platform Truth Social. 

The GDP price index rose 3.4 per cent in the first quarter of 2025, compared to an increase of 2.2 per cent in the fourth quarter of 2024.

“There has never been a recession caused by imports,” Michael Pearce, the deputy chief U.S. economist of Oxford Economics, wrote in a research note on April 29, reported the news portal CBS News.

“While they are recorded as a subtraction from GDP, imports show up as an offsetting positive elsewhere because they show up in increased consumption or business investment, or they are recorded as an increase in inventories,” he said. 

US Dollar and Imports

The US Dollar rose against other major currencies after the GDP data for the first quarter showed the US economy shrank amid the ongoing concerns over the Trump tariffs.

The Bloomberg US Dollar Spot Index was up 0.14 per cent to 99.371 as of 9:43 a.m. (EDT) on Wednesday, April 30.

According to a Reuters report, the pre-tariff imports rose 41.3 per cent in the first three months of the year, compared to the consensus forecast of 0.3 per cent, as per economists polled.

“A successful resolution to global trade policy would likely remove most of the volatility and uncertainty currently experienced by businesses and consumers,” Jeffrey Roach, chief economist at LPL Financial, told the news agency Reuters.