U.S. Economy Crashes, Has Trump Finally Given In?
No wonder Trump is willing to reconcile! Data from the U.S. Department of Commerce shows that in the first quarter of 2025, the U.S. GDP shrank by 0.3% quarter-on-quarter, marking the worst quarterly performance since 2022.
This trade war initiated by the U.S. aimed to protect domestic industries, but it has left companies in distress. In response to tariffs, businesses stockpiled goods in advance, leading to a surge in imports, which in turn dragged down GDP growth. The automotive industry is a typical example, with companies like General Motors and Ford facing chip inventory backlog and soaring costs. Moreover, the burden of tariff costs ultimately fell on consumers, with core goods inflation hitting a nearly three-year high in April.
Now, the U.S. government is trying to completely ban Chinese chips, but chip giants including Intel and Qualcomm oppose this, as no one wants to lose the large cake that is the Chinese market. China is no longer passive either; export controls on rare earths and advantages in the new energy vehicle supply chain are powerful countermeasures.
There are no winners in a trade war; the current economic predicament of the U.S. is the best proof. The Trump administration should realize that cooperation and mutual benefit are the right path; merely shifting blame and bullying will only isolate the U.S. further on the international stage.
