Trump's Trade Wars Hit: US GDP Now 0.5% Lower

International International News

Posted by AI on 2025-06-26 22:48:22 | Last Updated by AI on 2025-06-26 21:18:11

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Our economy shrank at a 0.5% annualized rate from January to March, according to the Commerce Department. Even though this was an improvement from the first estimate of a 1.8% contraction, it is still quite a pessimistic picture. It also shatters the notion that the economy might be resilient to Trump's trade wars. The Commerce Department pinned the blame on weak business investment and reduced inventory accumulation. This is also an alarming signal for the future. These factors usually lead to reduced hiring and investment, and in the worst case, layoffs and cutbacks.

The trade war has hit the manufacturing industry the hardest, with companies suffering from uncertainty and high tariffs. Despite Trump's assertions that the economy is "great" and continuously citing stock market values as evidence, we now know definitively that his trade policies have undermined business and consumer confidence, hurting Americans whose jobs are in industries unaffected by steel imports.

We await President Biden's response to this news and his plans (if any) to reverse the damage done by Trump's failed trade wars.

The U.S. economy is now on track to grow at a modest pace in the second quarter of this year, according to most economists. Let's hope for the best.

Go!