The surge in imports has caused the U.S. economy to contract for the first time since 2022

The U.S. economy contracted for the first time since 2022 in the first quarter, due to a sharp surge in imports ahead of tariffs and softening consumer spending, the first microcosm of the knock-on effects of Trump's trade policies. According to preliminary data released by the U.S. government on Wednesday, the annualized quarterly rate of real GDP in Quarter 1 contracted by 0.3%, well below the average growth rate of about 3% in the previous two years. The contribution of net exports to GDP fell by nearly 5 percentage points, according to the Bureau of Economic Analysis report. Consumer spending, which accounts for two-thirds of the economy, rose 1.8%, the weakest performance since mid-2023. Business equipment spending was a bright spot in the report, growing at an annualized rate of 22.5%.