US Downturn Amid Trump Tariffs Triggers Fears of Global Slowdown

The US economy shrank in the first three months of the year, according to official data, triggering fears of an American recession and a global economic slowdown.

- Lauren Aratani

Donald Trump, who returned to the White House promising to "make America great again," sought to blame his predecessor, Joe Biden, for the figure. However, economists said it was largely driven by an unprecedented surge in imports as consumers and firms braced for the president to impose his controversial wave of tariffs.

"This is Biden's Stock Market, not Trump's," Trump wrote on social media, adding that the contraction "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!!!"

Democrats said the figures were a damning verdict on the new administration's handling of the economy.

Biden's spokesman, Andrew Bates, responded to Trump's claims by saying the former president had handed his successor the "best-performing economy in the world" that was now "plummeting toward a Trumpcession".

He added that Trump was the "only president to have sent a strengthening economy into a nosedive in 100 days, and the only president to have bankrupted a casino".

Jeff Merkley, a Democratic senator, said: "Trump has been in office for only 100 days, and costs, chaos and corruption are already on the rise. The economy is slowing, prices are going up, and middle-class families are feeling the pinch."

Gross domestic product, a key measure of the US economy, contracted by 0.3% in the first quarter of the year, down from growth of 2.4% in the last quarter of 2024. The contraction - the first since the start of 2022 - puts the US on the brink of a technical recession, which is defined by two quarters of negative growth.

The drop in activity comes amid a big fall in consumer sentiment, which in April fell 32% to its lowest since the 1990 recession.

US stocks dropped yesterday morning. The benchmark S&P 500 and technology-focused Nasdaq each fell by as much as 1.5%.