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US economy is shrinking surprisingly – Trump blames Biden!
US economy contracted surprisingly in the first quarter of 2025. Trump blames Biden and experts warn of recession.
US economy is shrinking surprisingly – Trump blames Biden!
The US economy surprisingly shrank by 0.3 percent in the first quarter of 2025, while it still recorded growth of 2.4 percent in the final quarter of 2024. This first estimate of gross domestic product (GDP) was released by the Department of Commerce. President Donald Trump, who recently celebrated his 100th day in office, blames his predecessor Joe Biden for the decline and emphasizes that the economic downturn has nothing to do with his tariff policies.
Trump predicted an impending economic recovery and called for patience, despite criticism from Democrats who accuse him of pushing the US into recession and endangering jobs with his trade strategy. Democratic Senate Minority Leader Chuck Schumer called Trump's trade war a burden on American families. The International Monetary Fund (IMF) has revised its economic forecasts for the USA downwards. The IMF expects growth of only 1.8 percent for 2025, which is 0.9 percentage points below previous expectations.
Economic development and expert opinions
Experts were surprised by the contraction of the economy and had expected the effects of tariff policy to occur later. Bastian Hepperle, senior economist at Hauck Aufhäuser Lamp Privatbank, pointed out that the US government's "zigzag course" creates a high level of uncertainty, which negatively influences both investment and consumption decisions. He accused the current economic policy of a “false start” and spoke of “the first signs of slowdown”.
Other economists such as Ralf Runde from Helaba pointed out that the increase in the deficit in foreign trade must be viewed as a supporting factor for the negative development. Despite an increase in consumer demand and investment, experts note that these developments are weaker than they were towards the end of 2024. The US Federal Reserve (Fed) is expected to take a wait-and-see approach as uncertainty grows. Despite these challenges, Trump remains optimistic and expects companies to move to the US in record numbers.
The above facts reflect the current economic situation of the USA, such as daily news reported while T Online responded to the reactions and assessments of experts.