Wednesday morning, we learned that the U.S. economy contracted slightly in the first quarter of 2025. Real gross domestic product was down 0.3%a minor contraction but a large step down from the prior quarter’s GDP growth rate of 2.4%.

The negative impact of the tariffs, in particular, comes through clearly in the report.

Ever since President Donald Trump launched his trade war and his attacks on Federal Reserve independenceall accompanied by chaotic policy lurching, surveys of consumers and businesses have shown sharp drop-offs in confidence and sharp increases in expectations of higher inflation. Financial markets, of course, have been battered about, rising when the administration dials back the tariffs and vice versa. We’ve all been on some degree of pins and needleswaiting to see whether another self-inflicted wound is incoming.But for all that angst, until today, we didn’t see much impact of the president’s actions in the so-called hard data, meaning the numbers we get about the economy’s performance from the statistical agencies.

That’s why this GDP report is so important. The negative impact of the tariffs, in particular, comes through clearly in the report, which shows data only from January to March. So the report isn’t even reflecting the long list of “reciprocal tariffs,” currently on pause, that were announced on April 2.

One number from the GDP report embodies this impact: The trade balance took a huge dive in Q1, subtracting 4.8 percentage points from the growth rate. In a data series that goes all the way back to 1947, we’ve never seen a larger negative impact from trade in one quarter.

OK, that’s dramatic. But what does it mean?

There’s no mystery here. It means that consumers and businesses got very busy in January through March trying to front-run the tariffs, pulling forward spending that they normally would have spread across the year. In fact, we saw this coming. An earlier release of retail sales for March showed car and truck purchases getting a big bounce.And it’s not just imports. People and businesses are reasonably worried that tariffs will boost prices of domestic goods, which, as I’ve stressed on this pageoften include imported parts. Business equipment investment, including computers and software, was a bright spot in the report, up over 22%. But if those purchases were also pulled forward — and given the large spike in inventories, this appears to be the case — it implies that future quarters could come in even weaker. More spending now, less spending later.

Does this mean we’re in a recession? Definitely not. One bad quarter doesn’t make a new trend. The import spike (a historically large negative) and the inventory spike (a large positive) are based on incomplete data that will be fleshed out more in coming months. And while consumer spending slowed to 1.8% in Q1 of 2025 from a much stronger 4% in Q4 of 2024, that’s still a decent growth rate for this key GDP component, enough to keep the economy above stall speed.

We’ve all been on some degree of pins and needles, waiting to see whether another self-inflicted wound is incoming.

But this is a worrisome report. It syncs up all too well with what we’ve been hearing about how folks are feeling about the Trump economy, which is now polling underwater. It shows that Americans are highly attuned to, and quite well-informed about, the impact of the trade war on their living standards and are trying to get ahead of it.It also shows something else. I’ve been tracking these reports for decades now, and I’ve gotten pretty good at sniffing out what’s signal and what’s noise. And I can still feel a pulse, a pretty strong one, in the U.S. macroeconomy. The Trumpian chaos has clearly taken a toll on growth, as that topline minus-0.3% shows. But the chaos hasn’t yet broken the fundamentals. The job market’s still pretty robust; even with new inflationary pressures, real wage growth is still up.

If the administration were to stop now, to declare victory in the trade war (there’d be no actual victory, but when has that mattered to Trump?) and to send a clear message, one that they actually stick to, that they’re not going to reverse course tomorrow, there’s still time to dig out of the mess it has put us in. The hole isn’t yet too deep.

But I fear it won’t do so, and if I’m right, then we will likely remember this report as one of the first examples of the hard data starting to look just as bad as the soft data.

Jared Bernstein

Jared Bernstein was chair of President Joe Biden’s Council of Economic Advisers.

President Donald Trump’s plans to offer tariff relief to various industries being harmed by his haphazard and destructive trade war seems like overwhelming proof that this was a disastrous, ill-conceived idea from the beginning.

The Trump administration has floated the idea of offering farmers subsidies (essentially, government welfare being proposed by the purportedly anti-welfare party) to help them cope with rising costs and foreign nations pulling back on purchasing American-made goods. And on Tuesday, Trump signed two executive orders shielding automakers from some tariffs and allowing them to apply for relief over the next two years — although some experts say that won’t be long enough. Trump also exempted some electronic devices from tariffs earlier this month, though his administration says those exemptions will only be temporary.

It’s as if Trump has blown several holes in the U.S. economy and he’s trying to plug them all with his fingers to stop it from leaking out.

It’s as if Trump has blown several holes in the U.S. economy and he’s trying to plug them all with his fingers to stop it from leaking out. And his varying justifications for why the tariffs are supposedly necessary means there’s no telling when this trade war against the rest of the world will end.

For example, Trump has claimed that tariffs — at least on China, Mexico and Canada — were about stemming the flow of fentanyl into the United States. He has absurdly said that tariffs are about raising revenue to replace the federal income tax. And he has argued that tariffs are about bringing manufacturing back to the United States in a sizable way — even though economists say they will do no such thing.

And all of these justifications appear meaningless at the moment, given that the tariffs don’t seem to be forcing countries into the quick negotiations the president and his Cabinet have said would arise. Trump promised that dozens of trade deals would come to fruition before his 90-day pause on tariffs comes to a close, and, as of this writing, not a single one has been announced.

Meanwhile, some experts expect to see the worst impacts in the months ahead. Things clearly aren’t going as the Trump administration had anticipated, and the fact the president is offering relief (however insufficient) from the pain he is single-handedly inflicting on American businesses is a sure sign of that.

Ja’han Jones

Ja’han Jones is an BLN opinion blogger. He previously wrote The ReidOut Blog. He is a futurist and multimedia producer focused on culture and politics. His previous projects include “Black Hair Defined” and the “Black Obituary Project.”

Amid mounting scandals out of the Trump administration, House Republicans voted Tuesday in favor of a rule that creates hurdles for Democrats looking to investigate it.

Departments across Trump’s government have been rocked by scandals over a variety of issues: Elon Musk’s glaring conflicts of interest while gutting the federal government, Cabinet officials’ discussing sensitive military plans with civilians via a third-party messaging platform or members of Congress benefiting as the White House turned tariffs on and off. Democrats have tried to shine light on these and other scandals using what are called “resolutions of inquiry,” which can tee up what are essentially special votes over whether to provide information from the president or executive officials.

But on Tuesday, House Republicans won a 216-208 vote in favor of a rule that blocks such inquiries until October. Here’s how The Hill described the procedure Republicans voted to block:

Dismissing Democrats’ inquiries as “political hijinks and political stunts,” House Speaker Mike Johnson, R-La., gave Blue Light News a handwaving quote to justify the move, saying, “They showed us over the last four years, last eight years — they used lawfare, they used conspiracy theories, all these political weapons to just go after the president and make his life miserable.”

That’s pretty ironic coming from a Republican speaker, whose party was perfectly fine wasting timepeddling conspiracy theories and launching bogus inquiries into purported corruption by former President Joe Biden and his son. Rather, Johnson and fellow Republicans seem to be blocking Democrats from forcing votes to demand information and documents simply because — in their eyes — the less attention on Republican scandals, the better.

Take Musk, for example, whom Democrats had hoped to target with several inquiries: A recent NBC News survey found that 59% of adults have unfavorable views of him, compared to 41% who view him favorably.

Or take the Signal scandal, which Dems also hoped to target. A YouGov poll in March found 75% of Americans — and 60% of Republicans — consider Defense Secretary Pete Hegseth’s use of Signal to be a “serious” matter. And his use of Signal has only come under more scrutiny since then.

So, far from steering the House clear of “political hijinks” and time-wasting endeavors, the bureaucratic maneuver seems more like a transparent attempt to keep Democrats from shining light on the Trump administration’s controversies and increasingly unpopular shortcomings.

Ja’han Jones

Ja’han Jones is an BLN opinion blogger. He previously wrote The ReidOut Blog. He is a futurist and multimedia producer focused on culture and politics. His previous projects include “Black Hair Defined” and the “Black Obituary Project.”