The US economy has unexpectedly contracted in the first three months of this year, according to fresh data published, due largely to a surge in imports ahead of the introduction of sweeping tariffs by President Donald Trump.
The gross domestic product of the world's largest economy decreased at an annual rate of 0.3 percent in the first quarter, after growing 2.4 percent in the final months of 2024, according to an estimate from the US Commerce Department on Wednesday.
The data was sharply below the market consensus estimate of 0.4 percent growth, according to Briefing.com.
"The downturn in real GDP in the first quarter reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending," the Commerce Department said in a statement.
"100 days into his presidency, Donald Trump's red-light, green-light tariffs are shrinking our economy, with businesses stockpiling imports in anticipation of tariff doomsday," Democratic Senator Elizabeth Warren said in a statement after the GDP data was published.
US consumer spending also likely slowed down considerably, hampered by still-high inflation as well as worries about the impact of tariffs on the economy.
'Dramatic policy changes'
The figures were published on the 101st day since Trump's return to office on January 20. In that time, he has announced several rounds of tariffs, laying out plans in March to impose sweeping levies on top trading partners from early April in a bid to reset US trade relations.
The introduction of those tariffs sparked a selloff in financial markets, sending volatility surging to levels not seen since the Covid-19 pandemic and spooking investors.
"Usually, government policy doesn't change that much, particularly not in the first 100 days of a presidency," George Washington University economics professor Tara Sinclair told AFP before the data was published.
"But this one's different. I think it's pretty clear that there were dramatic policy changes that are directly weakening the economy," she said.
The drop in imports was "partly offset by increases in investment, consumer spending, and exports," the Commerce Department said.
