President Donald Trump defended his economic policies Wednesday, claiming that weak economic data showing a contraction in the U.S. GDP was the result of President Joe Biden’s leadership, not his own actions. Trump, speaking during a Cabinet meeting, pointed to signs of increased domestic investment, arguing that his tariff regime was beginning to show results.
“I have to start off by saying, that’s Biden. That’s not Trump,” Trump said, referring to the latest government data that showed the U.S. economy shrank by 0.3% in the first quarter of the year. This marked the first GDP contraction since 2022, falling well below the average growth rate of 3%.
Trump dismissed the disappointing figures, suggesting that the initial dip could be attributed to the early stages of Biden’s presidency. “Let’s give us a pass on the first month, we were sort of getting a little bit used to things,” he added.
The economic contraction was largely driven by businesses stockpiling imported goods ahead of Trump’s tariff implementation, which caused a significant decrease in net exports, dragging down GDP by nearly 5 percentage points. Cuts to federal funding also contributed to the decline.
Despite the negative data, White House officials pointed to several positive indicators, including increased consumer spending and a surge in business equipment purchases, arguing that these trends show the economy remains strong.
Trump, however, doubled down on the impact of his tariffs, suggesting that although the full effects hadn’t yet been realized, there were signs that his approach was working. He also took credit for pausing higher tariffs on numerous trading partners, except for China, which faces a 145% tariff under his regime. A 10% tariff remains in place for most other trading partners for a 90-day period, during which several countries are negotiating with the U.S.
While some investors remain concerned about a potential supply shock caused by the ongoing trade standoff with China, Trump maintained that the slowdown in cargo flows was a sign that Beijing would soon have to engage in negotiations. “At a certain point, I hope we’re going to make a deal with China,” Trump said, adding that he was “not happy” with the sharp decline in trade between the two nations.
Despite Trump’s optimism, the economic outlook remained shaky. ADP Research’s latest data showed a moderation in hiring for April, and broader concerns about the effects of the tariffs, including potential goods shortages and inflation, led to a selloff in the stock market.
Earlier, in a social media post, Trump urged investors to remain patient, reiterating that the economic struggles had nothing to do with his tariffs but rather with the “bad numbers” left by Biden. “When the boom begins, it will be like no other,” Trump wrote, claiming that the market’s downturn was a temporary setback.
While the S&P 500 Index had risen during Trump’s presidency, it has since dropped about 7% since his successor took office.
