| This week, we learned that the U.S. economy shrank during the first three months of the year — which coincides with most of President Donald Trump’s time in office. Economists I’ve talked to warn this could be just the beginning of tariff-inflicted pain on the economy, with some even seeing early warning signs of a recession or something similar to the 2008 financial crisis. Trump is trying to deflect blame by saying he inherited a bad economy, but so far polls show Americans aren’t buying that. Here’s what’s going on. Why the economy shrank in January, February and March The Washington Post’s Abha Bhattarai reports that the economic report the government released Wednesday revealed a slowdown primarily from people rushing to buy foreign cars, computers and other big-ticket items before tariffs kicked in. As a result, the U.S. imported twice as much in March as it exported. That slowed growth at home since exports count toward the nation’s economic output, while imports count against it. The economy could grow if people return to their regular consumption habits, but there are signs that Americans are feeling down about their own financial situations and pessimistic about the economy overall. And that could mean they pull back on spending now. “We’re starting to see the effects of tariffs already,” Diane Swonk, chief economist with the global accounting firm KPMG, said in a recent interview. “There has already been panic buying or holding off on buying until these tariffs go away.” Economists were already on edge about a potential tariff-inflicted recession, and a shrinking of the economy in the first three months of 2025 is the kind of data that only raises their fears. The tariffs haven’t really hit yet Economists I’ve spoken to expect tariffs to noticeably raise prices at some point this summer. If businesses haven’t stockpiled enough goods, that could even lead to empty store shelves. And as prices go up, businesses might have to lay off workers. Swonk warned that could lead to a nasty economic phenomenon known as stagflation: job losses combined with inflation. Michael Strain, an economist with the conservative-leaning American Enterprise Institute, predicted: “You’re going to see higher prices and a weaker labor market and a big hit to business investment spending. And then things will continue to get worse.” Trump says this has nothing to do with him Polls show that voters think that Trump owns the economy and that his tariffs are indisputably a drag on it. Even a majority of Republicans think tariffs could lead to a recession, a new Washington Post-ABC News-Ipsos poll finds. Yet Trump is trying to deflect blame a few ways, by blurring the facts. This week, he said voters knew this was coming. “They did sign up for it, actually,” Trump told ABC News. “And this is what I campaigned on.” Trump was indeed clear about his plans to institute tariffs (though the amount he promised varied widely as he campaigned). But he’s blaming former president Joe Biden for this, more than 100 days into his administration: “This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers,” Trump posted on social media Wednesday morning. Yet the economy was growing — albeit slowly — toward the end of Biden’s term in 2024. Abha reports that the last time the economy shrank was in 2022, when there was record inflation after the pandemic had wreaked havoc on global supply chains. | 
