President Donald Trump said on April 30 that people should “be patient” after the U.S. economy contracted in the first quarter of 2025, saying it would take time for his tariffs to work.
“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!!!” he wrote.
The president was responding to data showing that the U.S. gross domestic product (GDP) shrank at a 0.3 percent annual pace in the first quarter of 2025, or from January through March, representing the first drop in three years. It was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before U.S. tariffs came into effect.
“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 department said. “These movements were partly offset by increases in investment, consumer spending, and exports.”
Imports for the first quarter increased by 41 percent from the previous quarter, the highest increase since 2020, and shaved 5 percentage points off first-quarter GDP growth, the data show. Growth in consumer spending also slowed sharply, declining from 4 percent in October–December 2024 to 1.8 percent in the first quarter of 2025.
Federal government spending also dropped by 5.1 percent in the first quarter, according to the data.
Business investment rose by 21.9 percent as companies poured money into equipment. And a category within the GDP data that measures the economy’s underlying strength rose at a 3 percent annual rate from January through March, up from 2.9 percent in the fourth quarter of 2024. This category includes consumer spending and private investment but excludes volatile items such as exports, inventories, and government spending.
After the GDP data were released on April 30, the Dow Jones Industrial Average saw a drop of roughly 700 points, or 1.7 percent, as of 10 a.m. ET. The Nasdaq dropped 2.5 percent, or more than 400 points, and the S&P 500 shed 2 percent.
Since taking office on Jan. 20, Trump implemented numerous tariffs, including a 10 percent baseline tariff on nearly every country, along with a 145 percent duty on all Chinese imports and 25 percent tariffs on auto imports. This week, Trump signed executive orders to provide some relief to auto companies that do their final assembly of vehicles in the United States.
Meanwhile, Department of Commerce Secretary Howard Lutnick told CNBC that the White House had reached a deal with one country that will permanently ease the reciprocal tariffs that Trump had planned to impose. Lutnick did not identify the country.
“I have a deal done ... but I need to wait for their prime minister and their parliament to give its approval,” he told the outlet.
Trump had imposed higher, reciprocal tariffs on a number of countries with significant trade with the United States, but issued a 90-day pause on those duties earlier in April in order to hash out deals. Higher tariffs were placed on Chinese imports, however.
