President Donald Trump’s claims of a new economic “Golden Age” faced a sharp reality check, as new data has revealed that the US economy contracted for the first time in three years.
The 0.3 per cent annualized decline in GDP for the first quarter marked a reversal from the 2.4 per cent growth seen in the previous quarter and has cast a shadow over the administration’s overdrive of promoting the first 100 days of Trump’s second term.
The commerce department’s preliminary figures ignited political and economic debate, with critics pointing to the President’s aggressive trade policies—steep tariffs on Chinese imports—as a key factor behind the downturn.
Trump, who has touted his trade war as a means to end China’s “exploitation” of US industry, conceded during a Cabinet meeting that American families might begin to feel the effects. “Maybe the children will have two dolls instead of 30,” he said.
While the White House continued its celebratory tone in public events, with officials such as Attorney General Pam Bondi hailing Trump’s achievements, the economic data drew immediate concern from analysts.
Former Treasury Secretary Larry Summers described the first 100 days to CNN as possibly “the least successful... on the economy in the last century,” citing falling markets, weakening consumer confidence, and rising inflationary pressures.
But Trump has shifted blame onto his predecessor, according to reports.
“This is Biden’s Stock Market, not Trump’s,” he wrote on Truth Social, later repeating at a White House event that “this is Biden’s economy because we took over on January 20th.”
Democrats have pushed back. House Minority Leader Hakeem Jeffries said, “This is the Trump economy, it is a failed economy and the American people know it.”
Trump’s trade war has seen tariffs climb to 145 per cent on some Chinese goods, prompting retaliatory measures of up to 125 per cent on US exports. Critics argue that while the administration hailed these moves as victories, they have driven up costs for consumers and created volatility in the markets.
Trump’s economic advisers have attempted to spin the GDP decline claiming it reflected companies stockpiling goods ahead of tariff hikes—an effect analysts say is part of the instability Trump’s policies created.
The administration insists a boom is coming, pointing to $8 trillion in planned investments and urging Congress to pass a tax and spending bill. Yet the proposal faces hurdles from both Democrats and fiscally conservative Republicans.
As concerns grow over rising costs, disrupted supply chains, and falling investor confidence, Trump’s declaration of a new American prosperity appears at odds with the data.
Whether the public will embrace his vision or reject the economic toll of his trade-focused agenda remains uncertain.
But the economic doom stares the President in the face. As the BBC reported, Trump asked for more time on the US economy during a meeting at White House on Wednesday where he met CEOs of major companies, including Hyundai's Jose Munoz, Toyota's Ted Ogawa, and Johnson & Johnson's Joaquin Duato.