Trump latest: US economy shrinks in worst performance for three years - but president insists it's not because of tariffs

Trump doubles down on Biden criticism and says he was 'destroying' the US

Donald Trump kicks off the cabinet meeting and is talking about his "massive victory" at the election.

He says "we won on the basis of a great border and getting criminals out of our country".

But turning to the economy after today's figures, Trump says "I have to start off by saying that's Biden, not Trump".

"We came in and I was very against everything that Biden was doing in terms of the economy, destroying our country in so many ways."

He claims his administration has brought in investment worth $8trn, and says "there's never been a number like that".

 

White House hits out at Biden for 'economic disaster'

While we wait for the cabinet meeting to get under way, we've just heard from the White House after the US economy shrank 0.3% from January to March.

Donald Trump's press secretary has said "it's no surprise the leftovers of Biden's economic disaster have been a drag on economic growth" - the US president also put the blame with Biden earlier (see 2.17pm post).

"The underlying numbers tell the real story of the strong momentum president Trump is delivering," Karoline Leavitt said. 

"Robust core GDP, the highest gross domestic investment in four years, job growth, and trillions of dollars in new investments secured by President Trump are fuelling an economic boom and setting the stage for unprecedented growth as President Trump ushers in the new Golden Age."

Trump to hold cabinet meeting

We're expecting Donald Trump to hold a US cabinet meeting at the White House in the next few moments.

A source has told our US network partner NBC News that Elon Musk will also be in attendance - that comes after Trump's chief of staff said Musk was no longer working from the White House.

You can watch along in the stream at the top of this live page. We'll also be providing live text updates.

 

Inflation was easing in US - but then Trump's tariffs pushed up prices

More on the US economy now - which shrank by 0.3% in the January to March period.

We reported earlier how Donald Trump's tariff policies were having the opposite effect to what he wanted, so far at least - as they triggered a rush of American imports to beat price increases, worsening the trade deficit he hates.

Trump also campaigned last year to reduce inflation for Americans - with many saying this was a key factor in his victory.

But as with the trade deficit, Trump's own decisions may be working against him on prices.

Inflation was easing before tariffs hit

Wednesday’s report from the US Commerce Department (see our earlier posts on the US economy shrinking) showed that consumer prices rose just 2.3% in March from a year earlier, down from 2.5% in February. 

Excluding the volatile food and energy categories, core prices rose 2.6% compared with a year ago, below February's 2.8%. 

Economists track core prices because they typically provide a better indication of where inflation is heading.

The slowdown in price rises could be temporary, though, with economists forecasting that inflation could reverse its recent decline and reach 3% or higher by the end of this year.

 

More than 40,000 sign petition to stop Trump from addressing UK parliament

More than 40,000 people have signed a petition calling for Donald Trump to be barred from addressing the UK parliament on his state visit.

The US president appeared delighted back in February when Sir Keir Starmer presented him with an invitation from the King to an unprecedented second state visit.

But just one week after the petition was launched, 43,000 people have backed it.

"President Trump has shown a consistent disregard for democratic values," Corin Dalby, the campaigner behind the Change.org petition, has said. 

"He has made troubling remarks about the UK and its institutions, and is unable to clearly condemn the Russian invasion of Ukraine – which all UK political parties have strongly opposed. 

"The UK parliament should not provide a platform to a figure whose actions and words are so at odds with the principles we hold dear."

It's worth noting that Trump didn't address parliament during his last state visit in 2019, with then-speaker John Bercow saying he would oppose such a move.

The new petition calls on current speaker Sir Lindsay Hoyle and his counterpart in the Lords, Lord McFall, to adopt the same stance.

 

How Trump's tariffs could lead to shortages of toys and games

There are warnings Americans could start seeing shortages in a matter of weeks because of Donald Trump's tariffs.

"It's likely to be concentrated in categories where the US is heavily dependent on Chinese manufacturing and there aren't a lot of alternatives," Judah Levine, director of freight platform Freightos, said.

He warned that furniture, baby products and plastic goods, including toys, could be among the items hit the most.

But that impact is already being felt, with the chief executive of toymaker Basic Fun saying he paused shipments following Trump's tariff plan.

Jay Foreman halted shipments of Tonka Trucks, Care Bears and other toys from China after Trump's announcement at the start of the month.

"Customers will find Basic Fun toys in stores for a month or two but very quickly we will be out of stock and stock product will disappear from store shelves," he said.

The knock-on effect of Trump's tariff announcement is also being felt in the games industry.

Kevin Brusky, who owns small tabletop game publisher APE Games, said he has around 7,000 copies of three different games sitting in a warehouse in China.

He explained that the tariff bill of about $25,000 would wipe out his profit, and he has resorted to launching a Kickstarter campaign to help pay for the cost of the duties.

 

Trump talks power and Hegseth - while admitting Putin may be 'tapping' him along

A recap now of Donald Trump's interview, broadcast yesterday on ABC, during what was the 100th day of his second term in the White House.

The president was questioned about his unprecedented use of executive powers, which many critics have said are being deployed to avoid the democratic processes enshrined in the US constitution.

"What do you say to people who are concerned you are taking, seizing too much power and becoming an authoritarian president like we haven't had before?" interview Terry Moran asked.

"No, I would hate them to think that," Trump replied.

"I'm doing one thing: I'm making America great again. We have a country that was failing. We have a country that was laughed at all over the world. We had a leader that was grossly incompetent. He should have never been there."

Admits Putin may be 'tapping' him along

Trump had said in a social media post over the weekend that he was unhappy with Russia's continuing bombardment of Ukraine - saying "there was no reason for Putin to be shooting missiles into civilian areas, cities and towns, over the last few days" and that "it makes me think that maybe he doesn't want to stop the war, he's just tapping me along, and has to be dealt with differently".

Asked about the notion that the Russian president was "tapping" him along, Trump told Moran: "It's possible.

"Yeah, that's possible. Sure. He could be tapping me along a little bit. I would say that he would like to stop the war."

"You believe that?" Moran interjected.

"If... if it weren't for me, I think he'd want to take over the whole country, personally," Trump said.

"I always felt... so when I left, there wasn't even a chance that this would happen. When Biden got involved, I won't say whether or not he handled it properly, but obviously it wasn't good, because the war started."

Asked if he believed Putin wants peace, Trump said: "I think he does, yes." 

The president continued: "I think Putin wanted all of Ukraine," repeating his claim that Putin invaded because Biden was in office, and saying: "I think if I didn't win the election, he would have gotten all of Ukraine."

"And because of me, I do believe that... he's willing to stop the fighting," he added.

Declines to say he has 100% confidence in Hegseth

Asked about defence secretary Peter Hegseth, who has faced criticism since his appointment, Trump said he was "a talented guy" who is going to be "a very good defence - hopefully a great defence secretary."

But when pressed on whether he had 100% confidence in Hegseth, the president said: "I don't have a 100% confidence in anything, OK? Anything. Do I have a 100%? It's a stupid question."

 

Shipping bosses warn of impact from Trump's tariffs

While Donald Trump has claimed the shrinking US economy is not down to his tariffs, workers at American ports have expressed their concerns.

The director of the Port of Los Angeles warned last week that arrivals into the port will fall drastically within two weeks.

Gene Seroka said arrivals will "drop by 35% as essentially all shipments out of China for major retailers and manufacturers has ceased".

He added that cargo from South East Asia "is much softer than normal with tariffs now in place".

Meanwhile, the founder of a company working on worldwide cargo shipments has said ocean container bookings from China to the US have dropped 60% after Trump's tariffs announcement earlier this month.

Ryan Petersen, founder of Flexport, said ocean carriers have reduced their capacity by cancelling 25% of their sailings.

 

'This is Biden's stock market': Trump responds as recession fears grow

We've just had this response from Donald Trump, who has taken to Truth Social.

He puts the blame with Joe Biden, saying it's "Biden's stock market, not Trump's".

As we've been reporting, the first US economic growth figures covering Trump 2.0 have been published, showing the economy shrank at an annualised rate of 0.3% between January and March.

The data showed the main culprit was a surge in imports to beat trade tariffs, which have been on the rise since Trump won the presidential election.

Our Business Live presenter Darren McCaffrey has explained that most economists are now "effectively expecting a recession this year" in the US, adding "that is not good news for Trump".

 

What next for UK and Europe as US economy slumps?

There's been more bad news today about the economy linked to Donald Trump's tariffs, as we've been reporting here.

But what does the fall in US GDP mean elsewhere in the world?

The American figures were released on the back of European Union growth data, which also covered the pre-trade war first quarter.

Eurostat estimates showed a better than expected 0.4% quarterly growth rate - driven largely by Spain, our business and economics reporter James Sillars explains.

The 20 nations sharing the euro currency had been expected to collectively deliver a 0.2% figure, confirming lacklustre output improvements of the past two years.

Stimulus by the new German government and European Central Bank interest rate cuts are widely expected to help in overturning that trend.

Germany, which is exiting two years of recession, recorded preliminary growth of 0.2%.

UK data, due next month, is predicted to show a similar rate.

 

Trade shock own goal hits US economy - with worst performance in three years

The first US economic growth figures covering Trump 2.0 are out - and make for extremely grim reading at the White House.

The Commerce Department has reported, in a preliminary reading, that the world's largest economy contracted during the first three months of the year.

Economists and financial markets had largely expected growth of 0.3%.

But the measure showed that the economy shrank at an annualised rate (a calculation of performance over a 12-month period, as opposed to just one quarter) of 0.3% between January and March.

That was the worst performance for three years and sharply down on the solid 2.4% rate of growth measured over the previous three months.

So far, tariffs having opposite effect to what was intended

The data showed the main culprit was a surge in imports - stockpiling to beat trade tariffs threatened after confirmation that Donald Trump had won a second presidential term.

The US trade deficit - public enemy number one as far as Trump is concerned - has widened sharply since December.

That's in stark contrast to his central mission of cutting that gap between the value of America's exports and imports.

The rush to avoid tariffs has beaten several monthly records, with the deficit in goods trade hitting a new high in March.

True impact not yet known

Analysts say that while the headline figure appears to be a disaster for Trump, the impact from the hoarding of imported goods distorts the true picture of US economic health.

More important, many argue, will be how the commencement of the main trade war this month will play out.

There are fears that inflation will rise sharply due to higher import costs being passed on, limiting the US central bank's ability to cut interest rates for consumers and businesses alike.

All this at a time when stock markets and the dollar are still reeling from the effects of the "Liberation Day" trade salvoes.

Will there be a recession?

The International Monetary Fund recently forecast annual growth of 1.8% for the US this year.

But some economists see a 50/50 chance of a recession ahead.

US futures showed further falls for stock markets on Wall Street at the open. 

How Trump responds will be the most eagerly anticipated information for investors moving forward.

 

US GDP down 0.3% - as most economists predict American recession

US GDP fell by 0.3% in the first quarter of this year, it's just been announced.

Sky's Darren McCaffrey has been explaining the fall live on air, speaking to presenter Jayne Secker. 

McCaffrey says most economists are now "effectively expecting a recession this year in the United States".

"That is not good news for Donald Trump," he adds.

 

Harris to return later today with San Francisco speech

In this new world of Donald Trump 2.0, famous faces from the Biden era have vanished - including Kamala Harris.

The former vice president lost the 2024 presidential election to Trump.

Perhaps understandably, she's not sought the limelight much since, particularly once the transition from the Biden government to the Trump one was complete.

But tonight she will be speaking at a gala for Emerge America, an organisation that recruits female Democratic candidates, according to our US colleagues at NBC News.

"We are so excited to have former Vice President @kamalaharris giving the keynote to celebrate 20 years of Emerge and address the first 100 days of the Trump administration," Emerge America said in a post on X.

The speech marks the organisation’s 20th anniversary. 

Tickets range from $25 for virtual attendees and up to $50,000 for gala sponsors.

 

Who's standing up to Trump? And who isn't?

The last 100 days have seen Donald Trump direct his anger and hostility at various groups, agencies and people.

While some stayed silent in response, there have been organisations standing up to the US president.

Who is standing up to Trump?

Harvard University is suing the Trump administration after it rejected a list of demands from the White House and had £1.6bn of government funding frozen.

It marks the first major hurdle for the Trump administration in its crackdown on "inappropriate" ideologies on campuses.

The Associated Press is another to have stood up to Trump in his first 100 days after a US judge ordered its access to presidential events to be restored.

The White House had blocked the news agency after it refused to adopt the administration's renaming of the Gulf of Mexico to "Gulf of America".

 

Who isn't standing up to Trump?

Fear among Washington lawyers is said to have never been greater after Trump's 100 days.

His administration has targeted those who have been involved in investigating Trump, with firms caving to his demands in order to stay in business.

He's also ramped up his attacks on newspapers and traditional media by attacking those who are critical of him, restricting access and bringing lawsuits.

Trump's administration also wants to cut the federal funds that support public media in the US.

 

The World: Is Trump just winging it?

Another episode of The World with Richard Engel and Yalda Hakim was released this morning.

This week, Yalda and Richard discuss whether there is any rationale behind President Trump's foreign policy or if he is just winging it.

They analyse the most recent volte-face on his attitude towards Volodymyr Zelenskyy and Vladimir Putin, and the impact on his popularity at home.

They also discuss the status of a possible US-Iran nuclear deal.

To get in touch or to share questions for Richard and Yalda, email theworld@sky.uk - and click here to follow The World wherever you enjoy your podcasts.

 

Trump 'trolling' with 2028 talk, White House says, but hats still 'flying off the shelves'

Donald Trump is simply "trolling" when he suggests he might run for office for a third term, the White House said this week.

The president has continued to flirt with the prospect of serving until 2033, when he would be 86 years old.

In March, he told our US partner network NBC News that he was "not joking" about potentially seeking a third term, which the American Constitution forbids.

The idea came up on Monday during a White House news briefing reserved for what the administration dubs as "new media".

Press secretary Karoline Leavitt was asked to play a game where she was supplied with a Trump proposition, and she had to determine whether the president is telling the truth or "trolling".

Asked about his talk about running in 2028, she said: "Trump trolling, although the hats are flying off the shelves."

The Trump Organisation has begun selling red hats and T-shirts with "Trump 2028" embroidered in bright white font on the front.

Hats are priced at $50 (£37), while the shirts, which also feature the phrase "Rewrite the Rules", are priced at $36 (£26).

Trump seemingly debuted his latest piece of apparel - a hat with "Gulf of America" emblazoned on the front - earlier this week.

Sharp slowdown predicted for US economy - triggered by Trump's 'trade shock'

As we've mentioned, we're expecting some big figures on the US economy this afternoon.

But before those are released, economists have already been predicting a sharp slowdown in American gross domestic product (GDP).

A Reuters survey of economists forecast GDP likely increased at a 0.3% annualised rate last quarter, which would be the slowest pace since the second quarter of 2022. 

But the survey was concluded before data on Tuesday showed the goods trade deficit surged to an all-time high in March amid record imports, which prompted economists to sharply downgrade their GDP estimates. 

"The trade shock now looms large, overshadowing everything else that the White House has attempted to accomplish," said Joe Brusuelas, chief economist at RSM US. 

"The fact that we've gone from trade shock to financial shock to a possible recession in less than 100 days ought to give pause to those who want to continue down this road of tariffs." 

 

What effect did Trump's tariffs have?

The problem is the economy has been swamped by a deluge of imported goods by businesses eager to avoid higher costs, underscoring the disruptive nature of Donald Trump's often chaotic tariff policy. 

Economists estimated the trade deficit subtracted as much as 1.9 percentage points from GDP last quarter.

Consumer confidence is near five-year lows and business sentiment has tanked, while airlines have pulled their 2025 financial forecasts, citing uncertainty over spending on nonessential travel because of tariffs, which economists have warned will raise costs for companies and households. 

We should know more later today, when the Commerce Department's advance GDP report comes out.

However, some economists warned against placing too much weight on the GDP number, arguing that an unusually large amount of non-monetary gold had accounted for some of the jump in imports. 

-SKY NEWS