US Economy Dips for First Time in Three Years, Trump Blames Biden

In a defiant message following the first economic contraction in three years, U.S. President Donald Trump has called on Americans to remain patient, promising that the country will eventually experience an economic boom.

The president’s comments came after the Bureau of Economic Analysis reported a 0.3% decline in U.S. GDP for the first quarter of 2025—a downturn fueled largely by a surge in imports as companies rushed to stockpile goods ahead of anticipated tariffs.

Despite the negative growth, Trump dismissed concerns over his trade policies, shifting blame to his Democratic predecessor.

“This is Biden’s Stock Market, not Trump’s,” the president stated, claiming the numbers were a result of the so-called “Biden overhang.” He emphasized, “This has NOTHING TO DO WITH TARIFFS,” insisting that brighter days are ahead. “When the boom begins, it will be like no other. BE PATIENT!!!”

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However, economic experts say the data tells a different story. Peter Cardillo, Chief Market Economist at Spartan Capital Securities, pointed directly at Trump’s trade policies for the slowdown. “They’ve created uncertainty,” Cardillo said, noting that businesses are hesitant to invest due to the unpredictability of ongoing tariff changes.

The uncertainty has already affected corporate earnings, with several companies revising or pulling back their financial forecasts amid concerns over the widening trade war.

Still, some economic indicators offered a glimmer of hope—consumer spending remained strong and the Personal Consumption Expenditures (PCE) price index held steady, suggesting resilient domestic demand.

READ ALSO: US Economy Shrinks for the First Time in 3 Years as Tariff Fears Drive Import Surge

Wall Street, however, reacted negatively to the news. The S&P 500 dropped 1.5%, the Nasdaq plunged 1.97%, and the Dow Jones Industrial Average fell 1.15%. Investors were cautious ahead of earnings reports from tech giants Meta and Microsoft, though some analysts believe strong results from these firms could reverse the day’s losses.

Global markets also felt the pressure. European indices such as the STOXX 600 and FTSEurofirst 300 slipped slightly following the U.S. data, while emerging market stocks saw modest gains. Asia-Pacific stocks, including Japan’s Nikkei, closed higher on a more optimistic note.

Currency markets saw the U.S. dollar strengthen against the euro and yen, while the British pound and Mexican peso weakened. U.S. Treasury yields were mixed, reflecting market unease about future Federal Reserve actions and inflationary pressure stemming from tariffs.

Commodities weren’t spared either. Oil prices dropped to their lowest in more than three years, with Brent crude falling to $63.22 per barrel and U.S. crude down to $59.30, as trade tensions clouded the demand outlook. Gold prices also retreated slightly, reacting to the dollar’s strength.

While Trump continues to downplay the impact of his aggressive trade stance, economists warn that the road to recovery could be bumpy if policy uncertainty persists. For now, the markets—and the American public—will be watching closely to see whether the promised boom materializes.