U.S. economy goes into reverse amid tariff war… but Trump blames Biden and insists it has ‘nothing to do with tariffs’ amid plunging poll ratings

Donald Trump insisted figures showing the US economy going into reverse yesterday ‘has nothing to do with tariffs’.

The US President tried to blame predecessor Joe Biden after it emerged gross domestic product (GDP) shrank by a worse-than- expected 0.3 per cent in the first quarter of the year.

The grim figures – coming as Mr Trump celebrated his first 100 days in office – sent battered Wall Street stock markets into a fresh sell-off.

It added to the sense of chaos surrounding the White House after Mr Trump’s defiant appearance at a sparsely attended rally the night before, amid plunging poll ratings.

In a post on social media, the President refused to accept any responsibility for the economic setback – and urged Americans to be patient.

‘This is Biden’s stock market, not Trump’s,’ he posted on Truth Social. ‘Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers.

‘Our country will boom, but we have to get rid of the Biden ‘overhang’.

‘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!!!’

In a post on social media, the President refused to accept any responsibility for the economic setback – and urged Americans to be patient

Mr Trump threw the US and global economies into chaos on April 2 – so-called ‘Liberation Day’ – when he announced a series of swingeing tariffs on trading partners across the world

The US President tried to blame predecessor Joe Biden after it emerged gross domestic product (GDP) shrank by a worse-than- expected 0.3 per cent in the first quarter of the year

But US shares sank on the poor data, with the Dow Jones 1.7 per cent lower in early trading, the S&P 500 off by 2 per cent and the Nasdaq slumping 2.6 per cent.

The GDP contraction is the first time that growth in the world’s biggest economy has turned negative for three years. In the fourth quarter of last year, the economy grew at a pace of 2.4 per cent.

The US figures are annualised, meaning they show how fast the economy would be growing or shrinking if extrapolated over the course of a year.

Mr Trump threw the US and global economies into chaos on April 2 – so-called ‘Liberation Day’ – when he announced a series of swingeing tariffs on trading partners across the world.

The subsequent market chaos prompted him to suspend tariffs on most countries for 90 days and announce exemptions for some products. 

But a 145 per cent tariff on China – the world’s second biggest economy – remains in place. And Beijing has responded with a 125 per cent tariff on imports from the US.

And other duties on steel and aluminium as well as the car industry are causing havoc for supply chains and major companies’ investment plans.

The latest economic figures – covering a period before the much-anticipated ‘Liberation Day’ tariffs were announced – were massively skewed because of a surge in imports as US firms raced to bring in goods before they came into force. 

Meanwhile, Elon Musk seemed to be trying to get himself noticed during an increasingly rare White House appearance, wearing two baseball caps to a cabinet meeting

That widened America’s trade deficit with the rest of the world, restricting growth. Economists expect that to be reversed in the second quarter, boosting GDP.

But deepening uncertainty and the impact of tariffs – which will add to prices – are expected to drag growth into the red again later in the year.

The latest figures – which also showed inflation continuing to run too high – raised fears of stagflation, the dismal combination of stagnating growth and spiralling prices.

Kallum Pickering, of investment bank Peel Hunt, said: ‘A US recession is now a serious worry.’

Lindsay James, of wealth manager Quilter, said: ‘On Donald Trump’s 101st day in office, we are just now beginning to see the true impacts of his policies on the US economy.’

The figures came a day after Mr Trump held a rally of supporters at a half-full sports centre in Michigan to mark his 100 days in office and declared it was ‘the most successful first 100 days of any administration in the history of our country’. A poll showed the President’s approval rating had fallen to 42 per cent, with 53 per cent on the nation disapproving of his performance so far.

Meanwhile, Elon Musk seemed to be trying to get himself noticed during an increasingly rare White House appearance.

The Tesla tycoon – who is spending less time in the Oval Office before scaling back work at the Department of Government Efficiency – wore two baseball caps to a cabinet meeting. 

It was not clear why, or what the message under his ‘Gulf of America’ headgear was.

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