US economy contracts as tariffs unleash flood of imports

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WASHINGTON: The US economy has signed a contract for the first time in the first quarter in the first quarter, which collided with imports when businesses avoid excessive costs and indicated the distracted nature of US President Donald Trump’s chaos trade policy.

In a report on Wednesday, the Advanced Domestic Products (GDP) of the Department of Commerce (GDP), however, presented the potential for the economy to a great extent. Although consumer spending has decreased significantly, the pace of growth has been healthy. Businesses also increased investment in goods.

However, before importing duties, both consumers and business costs reflect the front loading.

Trump won voters’ anger over the economy last November, especially inflation. Consumer confidence is close to five years and business sentiment has taken a tank, while airlines have predicted their 2025 financial forecast, which cited uncertainty on spending unnecessary travel due to prices, which economists have said that the costs of companies and households will increase.

“If the result of the bursting on trade was that the results of the firms that were already purchased from the importers to defeat the taxes, the reduction in trade balance would turn in the second quarter,” said Carl Veneberg, chief economist, chief economist, economist, economist, economist, economist, economist. “This will make some GDP growth. However, corrosion uncertainty and more taxes – taxes are taxes on imports – by the end of this year, GDP growth will be dragged into red.” The Bureau of Economic Analysis of the Department of Commerce said in the first quarter’s GDP’s advance estimate, the total domestic products reduced the annual rate of 0.3 % in the last quarter, which is the first decline after the first quarter of 2022.

The federal government’s reduction in costs was also reduced, which is probably linked to cuts in the Trump administration’s aggressive funding, which identified mass firing and shuttering of programs.

Reuters voting economists predicted that the GDP had increased by 0.3 percent during the January period.

However, the survey ended before the data was revealed on Tuesday, which shows that the trade deficit between the import of records reached a height at all times in March, forcing most economists to faster their GDP estimates. In the fourth quarter, the economy increased by 2.4 percent.

Imports increased by 41.3 %, the biggest increase after the third quarter of 2020, when the nation was suffering from 19 pandemic disease, which fractured global supply chains. It eliminated a slight increase in exports, which resulted in a huge trade difference, which cut a record 4.83 percent point from GDP.

Imports were operated by both consumers and the capital. The BEA said it had identified and removed the import of silver bars as a form of investment in the first quarter.

It states that transactions in valuables, such as extraordinary gold and silver, are not considered as investment, and therefore the purchase of these metals is not included in consumer costs, gross private domestic investment or government expenses.

Extraordinary large quantities of non -financial gold jumped into imports over the past months, which led to a widespread disparity of GDP estimates. After the inventory collection, two straight quarter declines began to recover rapidly, which pushed some hits from GDP to imports.

US stocks opened less. The dollar received the dollar against a currency basket. US treasury production increased.

Front loading supports consumer costs

Consumer costs, which are more than two -thirds of the economy, have increased by 1.8 % in the fourth quarter after 4.0 percent. It was supported by both services and equipment, mostly through health care, housing and non -capable equipment. Most families spent ahead to avoid most prices. With the cooling of the labor market, consumers mostly save.

Trump gently softened his auto tariff shock on Tuesday through an executive order.

145 % of the revenue on Chinese goods, which has continued the trade war between Washington and Beijing, remains, as is a row of other import duties. The Trump views Trump as a device to increase tax deductions and increase revenue to restore a long -term US industrial base.

Business costs on goods increased at 22.5 %. Final sale to private domestic buyers, which eliminates trade, inventions and government spending, increased the rate of 3.0 %. But this traditional demand for domestic demand has been distorted by taxes.

Inflation was heated in the last quarter. Except for unstable food and energy components, the cost of personal use costs increased by 3.5 %, which is a faster speed at a speed of December 2.6 %. The so -called core PCE is one of the inflation inflation measures that the Federal Reserve has tracked for its 2.0 % target.

Economists expect the US Central Bank to begin a decrease in interest rates this year.