On April 30, 2025, the U.S. Department of Commerce (DOC) reported that the U.S. economy contracted for the first time since 2022, with gross domestic product (GDP) falling 2025% in the first quarter of 0,3 compared to the previous quarter. The decline was the result of the massive tariffs imposed by the Donald Trump administration, which experts have called a “tsunami” due to their impact on the United States’ largest trading partners. According to the DOC, key factors were a surge in imports before the tariffs were imposed and cuts in government spending to combat a record budget deficit.

According to the Commerce Ministry’s press release, the increase in imports, which are subtracted from the GDP formula, was caused by companies’ desire to import goods in advance before new tariffs came into effect. The average rate of import tariffs in the United States jumped to 22% — the highest in almost a century, RBC notes, citing Fitch economists. For example, tariffs on goods from China reached 34%, from the EU — 20%, and for some countries, such as Cambodia and Vietnam — 49% and 46%, respectively. This triggered a rush to import at the end of 2024, which temporarily increased the trade deficit, which reached a record $1 trillion in March 2025, according to Reuters.

Additional pressure on the economy was exerted by the reduction in government spending initiated by Trump to reduce the budget deficit, which in 2024 exceeded $3 trillion, and in February 2025 already amounted to more than $1 trillion. As Bloomberg reports, the Trump administration is actively "cutting" spending to compensate for the deficit, caused, among other things, by tax breaks introduced as part of election promises. However, according to the Yale Budget Lab, the reduction in government investment led to a cooling of consumer demand and a slowdown in industrial production.

Trump himself, on his social network Truth Social, rejected the connection between the decline and tariffs, blaming the Biden administration for the economic problems. “I was not in office until January 20th. Tariffs will soon kick in and companies will be moving to the US in record numbers. Our country will have an economic boom,” he wrote. However, analysts are skeptical. The Atlanta Federal Reserve’s GDPNow forecast indicated a 3,7% annualized decline in GDP (about 0,9% per quarter), which is close to the official data from the Commerce Department.

Trump's trade policy, which began with the introduction of 10-50% import duties on April 3, caused a collapse of stock markets: the S&P 500 index fell by 10,53%, NASDAQ by 11,44%, and Dow Jones by 9,26% on April 10-11, RBC reports. JPMorgan estimates the probability of a recession in the US at 60%, predicting a 0,3% drop in GDP instead of a 1,3% growth. Goldman Sachs gives a 45% probability of a recession, and Moody's warns of a possible loss of 5,5 million jobs and an increase in unemployment to 7%.