The US economy has declined at the beginning of Donald Trump’s second term. GDP has declined by 0.3% in the first quarter of 2025. This has happened for the first time in three years. In the last quarter of last year, the US economy grew at a rate of 2.4%. According to the New York Times report, the biggest reason for the decline in GDP is the huge increase in imports. According to experts, in view of the possibility of tariffs, American companies have imported in large quantities. Due to this, the GDP figure has come down. Consumer spending decreased, fear of recession increased Due to America’s increasing imports, economic growth has also declined by 5% points. On the other hand, consumer spending has also decreased rapidly. According to Boston College economist Brian Bethune, Trump’s policies are a major reason behind the deterioration of the condition of the US economy. Consumer spending accounts for 70% of America’s GDP, if people stop shopping out of fear, the situation can become serious. According to economist Joseph Brusuela, there is a 55% chance of recession in the US in the next 12 months. Trump has increased tariff on China by 125%. Trump has once again started tariff war with China in his second term. Trump has so far increased tariff on Chinese goods by 125%. On the other hand, he has given 90 days exemption in reciprocal tariff to more than 75 countries. In simple language, imposing 125% tariff on China means that a $100 product made in China will now cost $225 when it reaches America. Due to Chinese goods becoming expensive in America, their sales will decrease. Trump wants to give these countries time to negotiate new trade agreements by stopping tariff. Why tariff on China was increased? According to US Treasury Secretary Scott Besant, Trump has encouraged those countries by withdrawing tariffs, who did not open a front against America amid the growing trade war. Since China had announced to increase tariff on America from 34% to 84% on Wednesday itself. Therefore, Trump increased the tariff on China from 104% to 125%. China is putting emphasis on increasing new industry and innovation. China has government bonds of about 600 billion pounds (about 760 billion dollars) in America. This means that China has great power to influence the American economy. At the same time, China has also started its preparations. China has given an additional loan of 1.9 trillion dollars to the industrial sector. This has accelerated the construction and upgradation of factories here. Huawei has opened a research center for 35,000 engineers in Shanghai, which is 10 times bigger than Google’s California headquarters. This will accelerate the technology and innovation capacity.
