The U.S. economy shrank at a 0.3% annual pace from January through March, the first drop in three years. It was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before President Donald Trump imposed massive tariffs.

An early tally of the impact of President Trump’s tariffs is in — and it’s, well, not encouraging. The US economy shrank in the first quarter, the first decline in three years, the Commerce Department said on Wednesday.

The January-March expansion was the slowest in almost three years and was down from 2.4 percent in the last three months of 2024.

Nearing Trump's 100th day in office, economy isn't getting better for most, with tariffs, stock market convulsions and high grocery bills.

Underlying economic growth remained solid in early 2025, but tariffs and uncertainty are expected to cause a further slowdown.

The economy shrank 0.3% in the first three months of the year, a steep downturn from the pace of growth in 2024.

As recession fears reverberate from Washington to Wall Street, Wednesday brought the most comprehensive yardstick yet of the health of the U.S. economy yet as the government released the first estimate of the country’s gross domestic product over the first three months of 2025.