Commentary by Heather Cox Richardson
This morning the Bureau of Economic Analysis released a report showing an abrupt reversal in the U.S. economy. Gross domestic product (GDP), which measures the total market value of goods and services, shrank from a healthy 2.4% in the last quarter of 2024 to -0.3% in the first quarter of 2025. The shift is the first time in three years that the economy has contracted. The slump appears to have been fueled by a surge in buying overseas goods before Trump’s tariffs hit.
The stock market plunged on the news. Although it would recover later in the day, the stock market during President Donald Trump’s first 100 days in office has been the worst since the administration of Richard Nixon. Today Trump posted on his social media site: “This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers. Our Country will boom, but we have to get rid of the Biden “Overhang.” This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”
Observers noted that in January 2024, when the stock market was booming under Biden, Trump took credit for it, posting: “THIS IS THE TRUMP STOCK MARKET BECAUSE MY POLLS AGAINST BIDEN ARE SO GOOD THAT INVESTORS ARE PROJECTING THAT I WILL WIN, AND THAT WILL DRIVE THE MARKET UP.”
Trump held a televised two-hour Cabinet meeting today, at which administration officials sat behind red MAGA hats and praised him so extravagantly that right-wing commentator Ann Coulter posted: “Would it be possible to have a cabinet meeting without the Kim Jong il–style tributes?” He blamed Biden for the contracting economy and told reporters that “you could even say” that any downturn in the second quarter is Biden’s fault, too. The White House put out an official statement blaming former president Joe Biden for today’s report of the shrinking GDP and saying the country’s underlying economic numbers remain strong.
In fact, Biden left behind an economy that The Economist called “the envy of the world,” showing on the cover of the October special issue about the U.S. economy a roll of $100 bills blasting off into space. As Simon Rabinovitch and Henry Curr wrote in that issue, the U.S. had “left other rich countries in the dust.” “Expect that to continue,” the headline read. In Biden’s four years, the U.S. had added 16 million jobs, unemployment was at its lowest rate in 50 years, real wages for the bottom 80% of Americans were increasing, and inflation levels had come down almost to the Federal Reserve’s target from their highs during the post-shutdown shocks.
The pain from Trump’s tariffs has already hit agriculture as China has largely stopped buying American products, from pork and soybeans to lumber. Peter Friedmann, executive director of the Agriculture Transportation Coalition, a leading export trade group for farmers, told Lori Ann LaRocco of CNBC that the sector is already in “full-blown crisis” as farmers have sustained “massive” financial losses. (continued)