Trump blames Biden as US economy contracts amid tariff turmoil

President Donald Trump has placed blame on President Joe Biden for the latest economic setback, as official figures revealed a 0.3 per cent contraction in US gross domestic product (GDP) during the first quarter of 2025 — a period marked by escalating trade tensions and sweeping tariff measures initiated by Trump himself.

The downturn, reported by the US Bureau of Economic Analysis, marks the first quarterly contraction since 2022 and comes as a sharp reversal from the 2.4 per cent growth recorded in the final quarter of 2024, Caliber.Az reports citing foreign media.

Wall Street reacted swiftly, with US stocks falling at the opening bell and the FTSE 100 threatened with breaking its longest streak of gains in nearly a decade.

Trump, who reintroduced sweeping tariffs earlier this year targeting key trade partners including Canada, Mexico, and China, has rejected any link between the economic decline and his trade policies. “Bad numbers,” he wrote on Truth Social, asserting that he had to deal with the “overhang” left by Biden’s administration and that the downturn is “nothing to do with tariffs.”

The tariffs, launched in February and later extended to metals and automobiles, sparked a wave of pre-emptive imports by US companies seeking to mitigate the impact of rising costs. This surge in imports — which count as a negative in GDP calculations — was a major contributor to the decline.

“The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending,” the Bureau of Economic Analysis reported.

Adding to the economic strain was Elon Musk’s aggressive federal spending rollback. Under his leadership of the Department of Government Efficiency — colloquially known as "Doge" — federal expenditures were cut by 5.1 per cent, further contributing to the economic deceleration.

Trump has branded the new tariffs as part of his “liberation day” strategy to reinvigorate American industry and reduce reliance on foreign goods. However, critics argue that the policy has introduced volatility into global markets and placed undue pressure on domestic businesses already grappling with inflation and high interest rates.

With economic performance emerging as a critical issue in the lead-up to the 2026 midterm elections, both Trump and Biden face mounting scrutiny over their respective roles in shaping the country’s fiscal trajectory.

By Vafa Guliyeva