The White House is casting blame on the Biden administration for slowed economic growth as it pushes a positive economic image.
The US economy slowed for the first time in three years, with GDP decreasing at a rate of 0.3% for the first quarter of the year, tied to a surge in imports ahead of the roll out of new tariffs, according to data from the Bureau of Economic Analysis. Consumer spending also declined.
“That's Biden, that's not Trump, because we came in on January, these are quarterly numbers, and we came, and I was very against everything that Biden was doing in terms of the economy, destroying our country in so many ways,” Trump said, later in separate remarks saying “and I think you have to get us a little bit of time to get moving, but this is the Biden economy,” Trump later said.
The Trump administration instead stressed positive underlying indicators, including investment they say of around $8 trillion they tie to tariff policy and core GDP growth of 3%, as a sign of momentum.
“The private sector started really heating up after the election, even though I wasn't there, people knew what we were going to be doing and the private sector growth was actually very good. Very importantly, gross domestic investment was up an incredible 22% which they had never seen before. Every new investment, every new Factory. And every new job created is a sign of strength in American economy and a declaration of confidence in America's future,” Trump said.
Despite the administration’s message of confidence as Trump celebrates the first 100 days of his second term, he’s faced slipping approval ratings and consumer confidence, and markets reaction throughout the rollout.
Trump argued “tariffs will soon start kicking in.”
“This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th. 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!!!,” Trump wrote on Truth Social.
Small Business Administrator Kelly Loeffler argued that Main Street is “thriving.”
“And the loan volume that we've approved is up 80% in President Trump's first 100 days compared to the prior first 100 days administration. So what we're seeing is small businesses are investing in the future to hire, to grow their businesses and confidence is rising. Main Street is back, and manufacturing is back. Our loan volume for manufacturing is at record levels,” Loeffler said.
“What I'm seeing is that Americans are thanking me as I'm out on the road, telling me thank President Trump for believing in us, the American worker, the American business and industry, should be here and can be here again. So I'm seeing tremendous optimism,” Loeffler said.
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Some are pushing the administration to provide tariff exemptions, though, over concerns about the survival of small businesses.
“Small businesses are the lifeblood of the American economy, but because they operate on razor-thin margins, they are uniquely vulnerable to rising costs caused by the Trump Tariffs. These businesses simply do not have the financial cushion to absorb price shocks or the resources to navigate sudden changes to an already complex supply chain,” Senator Ed Markey wrote in a letter to the administration last week.
Loeffler when asked about considerations for exemptions called this period a “dynamic process.”
“This is a period of negotiation. We expect to have more certainty soon, and then once that soon, then the American business person will know what the playing field looks like, which is going to be a level playing field,” Loeffler said.
Small business owner Sarah Wells explained she’s facing both the burden of tariffs and down sales, and now working on cutting expenses.
Wells owns Sarah Wells Bags, which designs breast pump bags. She’s used a Chinese manufacturer for 13 years but said she is “starting over from scratch with a whole new manufacturer.”
“I would love to make it here. I cannot find anywhere that can do it, and even factories that have some level of small batch capability don't have the workforce to take on 100 new brands that are looking for new manufacturing. It's just the infrastructure is not here,” Wells said.
“If I wanted to open my own factory, I would have to have an SBA loan to do that. Where is the SBA disaster loan for the tariff trade situation? It doesn't exist. There's no resources. There's no training,” she added
When pressed on potential relief for small businesses Loeffler said they are working on tools, including expanded lending, measure around capital access, and supply chain access.
“We’re also going to be providing some tools for them to access a supply chain that is domestic, and making sure that they can onshore their suppliers that they know what's local. We'll talk more about that in the coming days, but we are looking at every possible angle to ensure we're providing resources in real time so that we can shift that supply chain back on shore,” Loeffler said.
But there remains uncertainty around tariffs, as the administration has implemented a universal 10% tariff, sector specific tariffs and is working to negotiate reciprocal tariffs with countries.
“I think there's probably two things we can start to see. One is are there going to be more announcements of what kind of progress is being made, or potential outcomes related to these negotiations that are ongoing with many countries under the reciprocal tariffs and kind of start to signal, what do we expect by 90 days. We're going to have a continuation of the status quo while we continue to talk, are there going to be announcements?,” said Greta Peisch, partner at Wiley Rein and former general counsel at USTR under the Biden administration.
“On the China tariffs, where we don't see a lot of movement in the negotiation space, I think it is a question, as those tariffs start to kick in, which are quite high with more impact actually being felt by importers, will that create some need for further exclusion or for other measures to address the impact? And so I think that those are two spaces where we can look at, you know, what happens next?”
To what extent the latest economic data is attributed to tariffs:
“I think the short answer is we don't know, and also to the extent that it is related to the tariff action, we also don't know how much is related to the tariffs themselves, and how much is related to the uncertainty and changes that have characterized the policy moves as they've unfolded,” said Peisch.
Some viewed the latest economic growth data as a troubling sign.
“The economy got smaller in the first quarter of the year, and that is before any of the tariff announcements have been accounted for, the first quarter doesn't include the April Liberation Day tariff policies and the ensuing chaos and economic deterioration that's followed,” said Lindsey Owens, executive director of Groundwork Collaborative, a think tank pushing economic policy change, and former advisor to Sen. Elizabeth Warren. “So I’m really worried. I’ve been worried about a recession for some time now, after today's numbers, I'm doubly worried, and I think the pain that we could be looking at for American families could be quite considerable when we think about recessions.”
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White House senior counselor for trade Peter Navarro dismissed the notion of an upcoming recession.
“The idea that there's a recession coming should be heavily discounted. Because when we take into effect that the tax cuts coming and the underlying strength the economy, then I think all things, all things are good,” Navarro said, calling today’s data a “one shot deal” with the surge of imports before tariffs took hold.
Meanwhile, another key inflation indicator for the Federal Reserve showed personal consumption expenditures were up 2.3% from a year ago, slower than last month.
“The last four years have been very tough for Americans, and we're doing everything that we can to reverse it. I’m very confident President Trump will be able to reverse it. The American Dream has been completely unaffordable for people. People haven't been able to buy homes in the last four years, and so what we're doing very aggressively is making sure that people can get back into homes and be able to afford homes in this country again,” said William Pulte, the director of the U.S. Federal Housing Finance Agency.
Pulte said he was not concerned about tariffs' potential impact on housing costs.
“I’m not really concerned about the cost of housing as it relates to tariffs. I think the President has it completely under control, and the anecdotal data that I've seen so far suggests that housing hasn't been truly that impacted by tariffs in any way, shape or form,” Pulte said. “So I think the focus right now is, how can we get inflation under control? The President's all over that, and you've also seen mortgage rates come down. It's about time. mortgage rates just got totally out of control in this country, and they need to go backward, not higher.”
