San José, CA – The latest report on Gross Domestic Product, or GDP, confirmed the slower growth of the economy under the Trump administration. In the first half of 2025, from January through June, the economy only grew at a 1.25% annual rate. This a bit more than half the rate of the first half of 2024, where the economy as measured by GDP grew at a 2.3% annual rate, showing that Trump’s trade war is a drag on U.S. economic growth.

While the GDP report for January through March showed negative growth, this was mainly because of the large surge in imports to try to beat Trump’s tariffs. If all other sectors had stayed the same, the import surge would have dragged the economy down by 4.7%. Then in the second quarter of the year, imports dropped by an even larger amount as Trump’s tariffs began to bite, which would have caused GDP to grow by 5.2%.

So, when we wash out the boom and bust in imports, by putting the first two quarters together, there was an average of 1.25% annual rate of growth. Because there was also a big shift in inventories of unsold goods, which surged in the first quarter as imports piled up, and then dropped in the second three months as they were sold off, economists often look at final sales to domestic private purchasers, which also excludes changes in government spending. This figure was only up 3%, as compared to a 5.3% rate of growth in the second quarter of 2024.

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