IN THE NEWS: Here’s How GDP Shows Tariffs are Starting to Take a Toll

Washington Post
April 30, 2025
Rachel Lerman, Alyssa Fowers, and Abha Bhattarai

FROM THE ARTICLE: The much-anticipated report on the nation’s economy released Wednesday showed that the US economy shrank during the first three months of the year — offering the first window into the widespread effects of the Trump administration’s tariff policies.

The sweeping tariffs, which have roiled global supply chains and international relations, have left an impression across nearly every part of the nation’s economy, the report shows. Businesses are stockpiling goods, causing imports to surge, and consumers are growing wary of spending too much money amid uncertainty about their financial futures.

The gross domestic product report, released by the Bureau of Economic Analysis, measures the value of goods produced in the country, providing a deep look at the health of the economy across a variety of sectors.

Imports surged during the quarter as businesses rushed to “front-load” inventory, or stock up on products before anticipated and threatened tariffs went into effect. Faced with uncertainty about what exactly new tariff policy would bring, companies across the United States started buying equipment, tech products, clothing, food and other goods their businesses rely on.

The reason for the surge is that companies are trying to beat tariffs on goods imported from abroad. For now, tariffs are frozen at 10 percent for most global trading partners until at least early July. After that, higher tariffs could be imposed on dozens of countries.
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“You’re seeing businesses make a lot more bookings to get those goods in because they know what they’re dealing with for the next 90 days,” said Paul Brashier, Global Supply Chain Vice President at ITS Logistics.

However, goods imported from China face a tax rate of about 145 percent on most products, threatening the future of trade with America’s second-largest trading partner.

Brashier is already starting to see shippers cancel or suspend their orders on goods from China. “There will be a drop in May,” he said. “A pretty significant drop. Just because of what China represents.”

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