GDP data shows U.S. economy shrank more than previously thought in early 2025
CBS1 day
US Economy Contracts 0.5% in Q1 Amid Tariff-Driven Import Surge
Above: Shoppers at a gift store in the Chinatown neighborhood of San Francisco, California, U.S. on June 25, 2025. Image copyright: David Paul Morris/Bloomberg/Getty Images
The Spin
Anti-Trump narrative
Donald Trump's reckless tariff brinkmanship has delivered exactly what economists warned; economic contraction, consumer panic, and business paralysis. His import taxes disrupted commerce so severely that the economy shrank 0.5% in his first quarter, while imports surged 37.9% as businesses desperately stockpiled before his next capricious trade assault. This is simply economic vandalism masquerading as policy.
Pro-establishment narrative
Despite Q1's 0.5% contraction, America's economic fundamentals remain rock-solid: robust labor markets, healthy 2.5% private domestic spending, and sustained government investment. The shrinkage reflects temporary tariff stockpiling distortions, not structural weakness. Markets are chasing headlines over reality. Smart money knows this economy's resilience runs far deeper than quarterly noise.