Trump blames old foe as US economy shrinks

US President Donald Trump is urging patience, casting blame and claiming victory in the face of a first-quarter US economic contraction and tariffs that have taken a bite out of his popularity, saying a resurgence is around the corner.

The US Commerce Department’s advance gross domestic product data on Wednesday pointed to the first quarterly decline in three years as businesses imported a flood of goods to avoid higher costs from Trump’s pending tariffs.

US gross domestic product fell at a 0.3 per cent annualised rate last quarter.

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Republican Trump blamed his Democratic predecessor, Joe Biden, for the poor showing.

“This is Biden’s Stock Market, not Trump’s,” he said on Truth Social.

“Our Country will boom, but we have to get rid of the Biden ‘Overhang.’

Trump added: “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!!!”

Some economists pointed to robust consumer spending and private investment as a sign that growth could soon rebound.

Trump and his aides struggled to coalesce around a message about the GDP number, simultaneously saying it was bad because of Biden administration policies but also good because of Trump’s efforts.

“You probably saw some numbers today, and I have to start off by saying that’s Biden,” Trump said to reporters, without elaborating as he referred to his Democratic predecessor.

He then said the figure was due to “distortions” from imports, inventories and government spending, components that figure into the GDP calculation.

He also celebrated a surge in business investment that some economists attribute to tariff-related spending.

“We had numbers that, despite what we were handed, we turned them around and we were getting them really turned around,” Trump said during a two-hour-long cabinet meeting that was broadcast live.

Earlier, Trump trade adviser Peter Navarro said: “This was the best negative print, as they say in the trade, the GDP – that I’ve ever seen in my life. It really should be very positive news for America.”

Navarro also discounted the GDP number, saying it declined because businesses were buying goods from abroad to get ahead of tariffs, an idea that clashed with Trump’s claim on social media that tariffs played no role in declining stock markets.

The varying explanations came as Trump crossed the milestone of 100 days in office and polls showed rising public discontent over the Republican’s handling of the economy.

A Reuters/Ipsos poll completed on Sunday showed 42 per cent of respondents approve of Trump’s performance in office, and 53 per cent disapprove.

The approval rate stood at 47 per cent just after his January 20 inauguration.

Fears of a recession have surged as Trump launched a global trade war, hiking tariffs so high that economists warn trade with some countries – notably China – could grind nearly to a halt.

The moves have shaken investors and companies.

Democrats were quick to seize on the economic uncertainty and lay blame squarely on Trump.

“This is not Joe Biden’s economy, Donald, it is your economy,” US House Minority Leader Hakeem Jeffries said on Wednesday, standing alongside fellow Democratic lawmakers.

“It is the Trump economy, it is a failed economy and the American people know it.”

On Wednesday, Trump on social media blamed sliding stock markets on Biden but later said he was taking neither credit nor “discredit” for market performance.

During the lengthy cabinet meeting, several of Trump’s aides took turns praising Trump’s economic policies.

“American families are finding their financial footing again,” said US Treasury Secretary Scott Bessent, adding that Trump was going to make the country an artificial intelligence and manufacturing superpower.

Bessent also said the country was experiencing lower mortgage rates, food costs and energy prices.

Benchmark 30-year mortgage rates are roughly the same as when Trump won the election in November, while food prices are rising at a three per cent annualised rate and energy prices are falling by the same rate, according to government figures.