US Economy Contracts 0.3% in Q1 Amid Import Surge

The U.S. economy contracted by 0.3% in the first quarter of 2025, marking the first decline in three years and ending a streak of steady growth. The downturn was primarily attributed to a surge in imports, as businesses and consumers rushed to stockpile goods ahead of President Trump's announced tariffs, with imports rising over 40%. Consumer spending growth also slowed significantly, and government spending fell, further contributing to the contraction. Financial markets reacted sharply to the news, with major stock indices dropping amid fears of a broader economic slowdown. President Trump blamed his predecessor Joe Biden for the negative economic results, while economists noted the unusual impact of tariffs and suggested the downturn may be temporary if import activity normalizes. Some analysts predict a potential rebound in upcoming quarters as the effects of front-loaded imports fade and companies adjust supply chains.