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On Wednesday, President Trump reacted swiftly to the announcement that the U.S. economy contracted for the first time in three years, which resulted in a drop in stock indexes.
He characterized the market situation as “Biden’s Stock Market,” emphasizing the need to eliminate the “Biden Overhang” in a post shared on social media.
In his post, he followed up with emphatic all-caps messages insisting it has “NOTHING TO DO WITH TARIFFS“ and imploring followers to “BE PATIENT!!!”
The announcement of a lower-than-expected GDP figure coincided with challenging conditions for Trump as he approaches the end of his first 100 days in office. Signs of economic downturn have intensified scrutiny on his trade policies, particularly after previous tariffs had already contributed to a notably poor stock market performance at the start of his presidency.
This Wednesday morning message was part of an urgent effort by Trump and his team to address the news. White House Trade Advisor Peter Navarro expressed views on CNBC, suggesting that it was “the best negative print I have ever seen,” highlighting aspects like an uptick in imports and domestic investments.
He urged markets to “look beneath the surface,” advocating for a more detailed understanding of the economic data.
The unfavorable news stemmed from a Bureau of Economic Analysis advance estimate of first quarter US gross domestic product (GDP) indicating a 0.3% decrease in GDP during the first quarter of 2025. This figure not only fell short of analysts’ expectations but also marked the first negative GDP reading since 2022.
This economic assessment spans the last 20 days of Joe Biden’s presidency and the first 70 days of Trump’s tenure, drawing a direct line between the outgoing and incoming administrations.
Trump is reportedly focusing on the initial days of Biden’s term while attempting to distance himself from the implications of his own tariff strategies, a move some economists contest.
The Competitive Enterprise Institute, a think tank dedicated to free-market principles, was quick to counter Trump’s narrative. Senior Economist Ryan Young remarked, “the US is halfway to a self-imposed recession, and tariffs are to blame.”
The GDP figure significantly contrasts the 2.4% growth rate reported in the fourth quarter of 2024 and adds to a troubling trend, particularly following a disappointing private sector jobs report also issued on Wednesday. This situation raises the stakes for the upcoming overall jobs report from the government.
Democrats wasted no time in capitalizing on the GDP data, with Senator Elizabeth Warren among the first to link the downturn directly to the president’s tariffs. She described Trump’s tariff approach as detrimental, saying, “Donald Trump’s red-light, green-light tariffs are shrinking our economy,” and expressed concern that “Americans are deeply pessimistic about surviving a cratering economy deliberately damaged by the President.”
Today also presents a unique opportunity for Democrats, as Warren and several senators plan to push for a Senate vote regarding Trump’s legal authority to impose his tariffs. A group of senators aims to challenge the legitimacy of the economic emergency declaration Trump used to justify his tariff policies, potentially culminating in a legislative vote on legislation that could lead to their termination.
While the vote might be symbolic, support from at least one Republican, Rand Paul of Kentucky, may heighten the pressure on the President.
Senate Democratic Leader Chuck Schumer further commented, alleging that Trump should dismiss his economic team, claiming that “today’s GDP number shows Donald Trump is running America the same way he ran his business — straight into the ground.”
The exchanges of the day reflect a longstanding pattern in Trump’s approach to stock market performance, where he often shifts responsibility based on favorable or unfavorable conditions. For instance, during a February 2021 speech, he maintained the narrative of “our stock market” even after being out of office for over a month and witnessing increases under Biden’s administration.
Source
finance.yahoo.com