America’s economy may actually be even weaker than it appears
CNN
President Donald Trump’s aggressive tariff plan was largely expected to impact the US economy’s first-quarter performance as companies loaded up on imported goods ahead of higher levies. But what few failed to anticipate was how much worse off the economy would have appeared without stockpiling.
President Donald Trump’s aggressive tariff plan was largely expected to impact the US economy’s first-quarter performance as companies loaded up on imported goods ahead of higher levies. But what few failed to anticipate was how much worse off the economy would have appeared without stockpiling. “People are stockpiling now. That’s helping the economy now — and then they’re going to spend even less,” said Ryan Young, senior economist at the Competitive Enterprise Institute, a libertarian-leaning think tank. GDP, or gross domestic product, which measures all the goods and services produced in the economy, fell to an annualized rate of -0.3% in the first quarter of this year, according to Commerce Department data released Wednesday. That remarkable drop from the prior 2.4% rate pushed stocks lower, ignited talk of a recession and underscored why Americans’ confidence in the economic outlook fell this week to the lowest level in 13 years. The core of last quarter’s decline was the rush to get ahead of Trump’s forthcoming tariffs. That pushed up goods imports by 51% in the first quarter, the fastest pace since 2020 when the US economy was reopening after Covid-related lockdowns. But, absent that surge in goods, the latest GDP report could have been even uglier. Trump made no secret of the fact that he was going to announce higher tariffs for all US trading partners as of April 2, a date he refers to as “Liberation Day.” But the question for businesses and consumers was: How high would those new tariffs be?
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