As President Trump marks his 100th day in office, the U.S. economy faces a challenging landscape, raising questions about the optimistic vision he laid out during his Inauguration Day speech.
Recent data from the Commerce Department reveals a contraction in gross domestic product (GDP) at an annual rate of 0.3% during the first quarter of the year, a stark decline from the solid 2.4% growth observed in the final months of 2024.
This quarterly GDP report encapsulates the economic activity from the tail end of the Biden administration into the early days of Trump’s presidency, amid the initial phases of his trade policies.
The downturn has been partially driven by a surge in imports, as businesses and consumers rushed to purchase goods before tariffs announced by the Trump administration took effect in early April.
Indeed, increased imports negatively impact GDP calculations. Furthermore, government spending also noted a decline, compounding the economic slowdown.
Despite personal spending typically being a cornerstone of economic growth, it has slowed significantly as well, growing at an annual rate of only 1.8% in the first quarter, a sharp drop from previous levels.
Mark Zandi, the chief economist at Moody’s Analytics, pointed out that while consumers were still contributing to the economy, their enthusiasm had notably diminished compared to earlier quarters.
The index of consumer confidence compiled by the Conference Board has experienced a continuous decline for five consecutive months. Current surveys indicate that consumers now regard tariffs as a more pressing concern than inflation, leading to fears that the import taxes could inflate prices and potentially trigger a recession.
Zandi emphasized that a recession often stems from a loss of consumer faith in job security, which in turn leads to reduced spending and economic contraction.
Although the job market has remained relatively stable with a reported unemployment rate of 4.2% in March, expectations regarding job security are at their lowest since 2009, signaling a possible shift in the labor market.
Moreover, the recent decline in the stock market has further eroded consumer confidence. As of Tuesday, the S&P 500 has dropped 7.3% since Trump’s Inauguration Day, with the tech-heavy Nasdaq experiencing an 11% decline.
This slump marks the worst start for the stock market under a new presidency since the 1970s.
Amid this backdrop of uncertainty, businesses are grappling with the unpredictability of the current economic climate caused by Trump’s tariffs, which include 10% taxes on most U.S. imports and significantly higher tariffs on numerous Chinese goods.
Curt Carpenter, a business owner in Boston, finds himself in a wait-and-see mode, hoping that the looming tariffs will not have a long-lasting adverse effect.
Running a furniture and lighting store, Carpenter relies heavily on imports from China and claims that the current situation has been more detrimental to his business than the 2008 housing crisis.
“At the end of the day, it’s just a tax on the end consumers,” he noted, expressing concern over lost sales opportunities not due to competition but rather the direct impact of tariffs.
While many businesses share Carpenter’s apprehensions, some are welcoming the tariffs.
Tom Barr, a third-generation mold maker from Michigan, reports increased interest from potential customers in light of the tariffs, particularly from clients in the auto industry who are reconsidering sourcing options.
He notes that he has received inquiries from Ford Motor Company exploring potential collaboration, suggesting that tariffs could incentivize manufacturers to bring production closer to home.
However, Barr also believes that tariffs should be more selectively implemented to support domestic manufacturers without hampering the overall economic environment.
As the economy faces multiple challenges in these initial months of Trump’s administration, the outlook remains uncertain, with consumers and businesses alike hoping for clarity amid shifting policies.
image source from：https://www.npr.org/2025/04/30/nx-s1-5380204/trump-economy-gdp-tariffs-recession-consumers
