US President Donald Trump - Photo: REUTERS
According to the New York Times , the US Department of Commerce has just released its economic report for the first three months of 2025. Notably, US GDP has decreased by 0.3% compared to the same period in 2024.
The truth about the US economic downturn
At first glance, this seems like a striking reversal from the strong growth seen in late 2024, when the world's largest economy grew at a rate of up to 2.4%.
However, the New York Times emphasized that this figure does not fully reflect the situation. In fact, the decline in US GDP in the first quarter was due to businesses importing goods in bulk to prepare their stocks to cope with new tariff policies under US President Donald Trump.
Normally, GDP only counts goods and services produced domestically, not imports. However, instead of measuring domestic output directly, the US government calculates GDP by taking the total of everything sold in the economy and subtracting imports.
So, when you look more closely at other metrics like consumer spending and business investment, the picture of the US economy is somewhat brighter. The economy, though slowing, is still growing positively, slowly and steadily.
Specifically, consumer spending in the first quarter increased by 1.8% year-on-year, down from 4% at the end of 2024.
However, some economists say the harsh winter weather in the southern United States in January made many people reluctant to go out shopping.
Similarly, business investment in equipment rose sharply in the first quarter, despite business leaders becoming increasingly pessimistic about the economic outlook.
But that solid foundation can be eroded quickly. First-quarter economic data showed that tariffs were already having an impact on the economy before they fully took effect.
Economic forecasters predict spending and investment will slow in coming months as tariffs push up prices and uncertainty makes businesses hesitant to act.
"There are many reasons to believe that the underlying trend of the US economy will weaken," said Ben Herzon, an economist at S&P Global Market Intelligence.
Be patient?
The US Department of Commerce report was released on the day Mr. Trump celebrated his first 100 days in office - Photo: REUTERS
Responding to the results, Mr. Trump immediately asked people to be patient and firmly defended his tariff policy that will eventually help the economy boom.
The US President said the poor economic results were due to... former President Joe Biden, even though Mr. Biden was in power for only 20 days in the first quarter.
"This is Biden's market, not Trump's," Trump asserted. "Our country will boom, but first we must remove the 'Biden burden.'
This will take time, NOTHING TO DO WITH TARIFFS, just him leaving us with bad numbers. But when the economy comes back, it will be booming like never before. BE PATIENT!".
Source: https://tuoitre.vn/kinh-te-my-sang-hay-toi-duoi-thoi-ong-trump-202504302221156.htm
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