The US economy unexpectedly contracted in the first three months of 2025, according to new data. That was largely due to a surge in imports before President Donald Trump introduced sweeping tariffs, AFP reports.

The gross domestic product of the world's largest economy declined at an annual rate of 0.3 percent in the first quarter after growing at a 2.4 percent pace in the final months of 2024, according to a US Commerce Department estimate.

The data was sharply below the market consensus estimate of 0.4% growth, according to Briefing.com.

“The decline in real GDP in the first quarter reflected import growth, a slowdown in consumer spending, and a decline in government spending,” the Commerce Department said in a statement.

The data was released on the 101st day since Trump's return to power on Jan. 20.

In that time, he has announced several rounds of tariffs, and in March laid out plans to impose sweeping levies on leading trading partners starting in early April in a bid to restore U.S. trade relations.

The imposition of these duties triggered a sell-off in financial markets, causing volatility to soar to levels not seen since the Kovida-19 pandemic and spooking investors.

“Usually government policy doesn't change that much, especially in the first 100 days of a presidency,” George Washington University economics professor Tara Sinclair said before the data was released. “But this is different.”

“I think it's pretty clear that there have been dramatic policy changes that directly weaken the economy,” she said.

After the dramatic market move in April, the Trump administration announced a 90-day pause on higher tariffs for dozens of countries to allow for trade negotiations while maintaining the 10% base rate for most countries.

It also announced sectoral measures on steel, aluminum, and non-U.S.-made autos and parts, as well as broad new tariffs totaling 145% on China.

Beijing responded with its own high, targeted tariffs against U.S. goods. | BGNES