Surprise decline in US GDP at the start of Donald Trump's term, who attacks Joe Biden

A surprise decline. The US economy turned negative in the first quarter, a turn that President Donald Trump blamed on his predecessor Joe Biden on Wednesday. The Republican billionaire, who has vowed to make the United States richer, is facing figures showing a decline in the country's gross domestic product (GDP) at the start of the year, while the US economy was still booming at the end of 2024.

At an annualized rate, the preferred measure in the United States, GDP contracted by 0.3%, according to an initial estimate released Wednesday by the Department of Commerce. This result—the first decline in US GDP since 2022—is significantly below the expectations of most analysts, who nevertheless anticipated a significant slowdown, with GDP up only slightly (+0.4%) for the world's largest economy.

"Our country is going to take off economically, but first we have to get rid of the remnants of Joe Biden," reacted President Trump on his Truth Social platform, who this week celebrates the first 100 days of his second term, which began on January 20. "It's going to take a while, it has nothing to do with tariffs, it's just that he left us with bad statistics," said the head of state, urging his fellow citizens to "BE PATIENT!!!"

A little later, at the cabinet meeting, he appeared confident, boasting about the arrival of massive investments in the United States. He said that China, on the other hand, was "stunned" by the customs duties he had imposed, with "factories closing" across the country "because we no longer buy their products . " "I didn't want that to happen," he added, saying he "greatly appreciates" his Chinese counterpart Xi Jinping and "hopes" for an agreement with Beijing.

At the same meeting, he admitted, however, that there could be supply disruptions and price increases on the American side. "Maybe children will get two dolls instead of 30, and maybe the two dolls will cost a few dollars more," he said.

The Democratic opposition believes the US economy is heading for disaster. Senate opposition leader Chuck Schumer said that "Donald Trump must acknowledge his failure, reverse course, and immediately fire his economic team."

The decline in GDP in the first quarter was largely due to the calculation rule that deducts imports from the production of national wealth. However, foreign purchases surged at the beginning of the year, as businesses and consumers rushed to acquire certain goods before they became more expensive under the new tariffs.

The downside: advance purchases mean less spending later, which could lead to further sharp swings in future data releases. The US economy was previously more than humming along, with growth of 2.4% in the final quarter of 2024 (annualized), full employment, and inflation on the verge of being brought under control. According to another release on Wednesday, job creation in the US private sector slowed sharply in April, falling short of expectations.

Conversely, the US president is finding comfort in the latest inflation data. The official PCE index released Wednesday shows that price increases slowed to 2.3% year-on-year in March, before the bulk of the new tariffs were imposed. This lull is largely the result of falling gas and oil prices, fueled by growing doubts about the health of the global economy. "I usually consider the impact of presidents on economic performance to be overstated, especially during their first 100 days," Tara Sinclair, an economics professor at George Washington University, told AFP before Wednesday's data releases. "But this time, " she added, "it's different, because the surge in imports is a direct result of buyers avoiding the president's tariffs."

Since April, the executive branch has significantly increased tariffs on foreign products and more than doubled surcharges on those from China. Beijing has retaliated with further tariffs, enough to curb US exports, a driver of growth. American consumption—another fuel of GDP—is also under scrutiny, as several recent indicators show that their confidence in the future has plummeted.