The U.S. economy undershot expectations and shrank 0.3 percent on an annualized basis during the first quarter of 2025, according to a Wednesday Commerce Department report. 

Economists had estimated that the economy would grow by 0.4 percent during this quarter, according to CNBC; that growth has been hampered by uncertainty over tariffs as well as declining government spending (a category that makes up approximately 23 percent of U.S. GDP). Consumer spending growth also slowed, increasing just 1.8 percent, down from 4 percent last quarter.

The Wall Street Journal noted that much of the decline in headline GDP growth came as a result of a sharp drop in net exports, not because of a decline in the U.S. export market, but because of a surge in imports as companies and consumers pulled import purchases forward to try to get ahead of the costs imposed by tariffs. “The headline decline overstates weakness because a lot of that was tariff-induced pull-forward,” Shannon Grein, a Wells Fargo economist, told the Wall Street Journal.

President Donald Trump blamed the poor economic performance on Joe Biden. In a post on his Truth Social account Wednesday, Trump said, “This is Biden’s Stock Market, not Trump’s… Our Country will boom, but we have to get rid of the Biden “Overhang.” This will take a while, has NOTHING TO DO WITH TARIFFS.”