GDP Contracts 0.3% Amid Recession Fears, Trade Disruptions

The first GDP report of President Trump's second term showed a 0.3% contraction in the U.S. economy for the first quarter, the first such decline in three years, raising recession concerns amid ongoing tariff disputes with China and other trading partners. While Trump and some officials attribute the weak performance to economic conditions inherited from the previous administration, critics and economists point to the trade war and tariff uncertainty as key factors, with some warning of drying business investments and reduced consumer confidence. Some analysts, including former Federal Reserve Vice Chair Richard Clarida, argue that the contraction may be overstated due to a surge in imports ahead of tariff implementation, suggesting the final GDP figure could be revised upward. Despite the negative headline number, there are indications of resilience, such as strong consumer spending compared to government spending and halted inflation rates. However, the decline in cargo shipments at major U.S. ports, particularly those dependent on trade with China, signals broader economic repercussions that may spread nationwide. As Trump faces sinking poll numbers, Republican lawmakers express increasing unease about the political fallout from the economic slowdown and unpopular tariff policies.