Donald Trump's attribution of the 0.3% contraction in U.S. economy during 2025 1st quarter to the "Biden Overhang" obviously overlooks the immediate impacts of his own trade policies. The downturn was primarily driven by a significant 41.3% surge in imports, as businesses rushed to stockpile goods ahead of implementation of new tariffs, including a 145% levy on Chinese imports and a 10% universal import tariff. This surge in imports led to a record trade deficit, which subtracted approximately 4.8 percentage points from GDP . Additionally, consumer spending growth slowed to 1.8%, and government spending declined due to federal budget cuts and layoffs . To address these challenges, the administration could consider reassessing the scope and timing of tariffs to mitigate economic disruptions. Engaging in proactive trade negotiations with key partners may also help. Furthermore, policies supporting household incomes encouraging more consumer spending along with fiscal measures, such as infrastructure investments or tax incentives for small businesses, could stimulate domestic demand. Collaborating with the Federal Reserve to ensure monetary policies complement fiscal strategies is crucial. By taking these steps, the Trump can manage stabilizing the economy and setting the stage for sustained growth in next quarters. If the stock market remains bearish and consumer confidence continues to decline, retail investors might become more cautious, reducing their interest in high-risk assets like crypto. However, new tariffs are presented as part of an “America First” agenda, which resonates with his supporter base. If the administration successfully frames these tariffs as measures that will strengthen U.S. economy in long term, it could bolster Trump’s popularity among crypto enthusiasts, sustaining or even driving demand for $TRUMP , especially if Trump ties the coin to his economic vision, such as positioning it as a symbol of American economic sovereignty or a hedge against inflation.
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