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The American economy shrank by 0.3 percent during the first quarter of this year, marking the first drop in three years as President Donald Trump’s tariff policies disrupted businesses and their supply chains.
The tariffs imposed on other countries have created uncertainty among both businesses and consumers. The economy, as a measure of GDP, shrank in part because of a rise in imports as companies stockpiled goods to avoid Trump’s tariffs.
Before the figures were released, analysts noted that a decreasing GDP figure because of this trend would not show economic weakness; however, the number was lower than most economists projected.
The number released covers a time period before Trump’s so-called Liberation Day, when he announced widespread tariffs on allies and foes alike.
This marks the worst quarter for the U.S. economy since 2022, when the country was still heavily affected by the Covid-19 pandemic. Comparatively, the economy grew by 2.4 percent in the fourth quarter during the final months of President Joe Biden’s term in office.
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