Imports surged as firms and consumers scrambled to bring goods into the country before the worst of Mr Trump’s tariffs took effect. They rose by an astonishing 41% at an annualised rate. Yet that alone is not enough to explain the drop in GDP.

The U.S. economy contracted 0.3% in the first quarter of 2025, the first negative reading since the Covid pandemic, according to an initial measurement by the Commerce Department.

The gross domestic product reading fell short of the 0.4% growth that economists surveyed by The Wall Street Journal expected.