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U.S. Economy Contracts, Fueling Recession Fears

The world’s biggest economy has shrunk for the first time in three years, according to official figures.

By , an energy and environment reporter at Foreign Policy.

A man is seen in profile as he stares at a screen at the New York Stock Exchange. Other traders are visible sitting at their own monitors in the background, lit by the blue glow from the screens.

Traders work on the floor at the New York Stock Exchange at the opening bell in New York City on April 29. Angela Weiss/AFP via Getty Images




Welcome back to World Brief, where we’re looking at the latest report card on the U.S. economy, escalating tensions between Pakistan and India, and Turkey’s widening crackdown on political opposition.


“BE PATIENT!!!”

U.S. President Donald Trump may have just celebrated his first 100 days back in office, but official economic figures released on Wednesday are spoiling his party.

Welcome back to World Brief, where we’re looking at the latest report card on the U.S. economy, escalating tensions between Pakistan and India, and Turkey’s widening crackdown on political opposition.


“BE PATIENT!!!”

U.S. President Donald Trump may have just celebrated his first 100 days back in office, but official economic figures released on Wednesday are spoiling his party.

In his inaugural address this January, the U.S. leader vowed to usher in a “golden age of America.” Yet initial economic reports aren’t looking so promising. The U.S. economy shrank by 0.3 percent in the first three months of 2025, according to a new report by the Commerce Department’s Bureau of Economic Analysis, marking the first time that the world’s largest economy has contracted in three years.

The decline was primarily driven by a surge in imports, the report said, likely as businesses raced to secure foreign goods before Trump’s long-promised “Liberation Day” tariffs went into effect. Government spending also fell while consumer spending slowed, according to the report.

The latest figures are likely to further intensify uncertainty for investors and businesses as well as boost recession fears, which have hung over the U.S. economy as Trump has unleashed staggering tariffs on much of the world, and in particular China, which currently faces 145 percent tariffs on most goods. Stocks tumbled on Wednesday in the wake of the Commerce Department report’s release.

Mark Zandi, the chief economist at Moody’s Analytics, said in a post on X that the 0.3 percent decline in GDP “overstates the economy’s weakness, but it is weak.” He added that the “threat of tariffs and DOGE cuts weighed heavily on the economy in the quarter,” referring to the newly created Department of Government Efficiency.

“Most worrisome is the weak growth in consumer spending, and that is despite the boost to buying as consumers rushed to get ahead of the tariffs,” Zandi added. “The economy isn’t in recession, but is on the precipice.”

The report’s findings mark a sharp reversal from the strong growth that the economy was exhibiting in the final months of 2024—a fact that Democratic lawmakers quickly seized on to slam Trump’s economic agenda.

“The report card is out. It’s a pretty objective fact that the GDP was growing at 2.4 percent in the final quarter of last year, when President Biden was in office,” Rep. Ro Khanna said in an interview with Fox News. “The policies just aren’t working,” He added. Sen. Chuck Schumer said in a statement that Trump needed to “admit his failure and reverse course, and immediately fire his economic team.”

Trump, for his part, urged Americans to “BE PATIENT!!!” in a post on Truth Social and said that his predecessor, former U.S. President Joe Biden, was to blame for any economic woes. “Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers,” he said, noting that he was only inaugurated on Jan. 20.

“Our Country will boom, but we have to get rid of the Biden ‘Overhang,’” he said. “This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other.”


Today’s Most Read


What We’re Following

Attack fears. Pakistan said on Wednesday that it had “credible intelligence” indicating that India plans to attack it in the next 24 to 36 hours, without offering further details. Prime Minister Shehbaz Sharif called on Washington to push India to “dial down the rhetoric and act responsibly.” Indian officials have not yet publicly responded.

Tensions between the two countries have soared in the aftermath of last week’s deadly shooting in India-administered Kashmir, which killed 26 people and marked the deadliest attack on civilians in the territory in nearly two decades. The Kashmir Resistance militant group claimed responsibility for the attack, and India has blamed Pakistan, which it has accused of backing terrorism targeting India. Islamabad denies involvement in the attack.

Pakistan said that India’s planned attack will be made “on the pretext of baseless and concocted allegations of involvement in the Pahalgam incident,” referring to the deadly shooting in Kashmir. Islamabad also warned that “any such military adventurism by India would be responded to assuredly and decisively.”

Clashes in Syria. After two days of deadly clashes between Syria’s pro-government fighters and Druze militia on the outskirts of Damascus, Israel is also getting involved. Israeli officials announced on Wednesday that they had conducted an airstrike near Damascus as a “warning operation.” At least 39 people have been killed in the clashes, according to the U.K.-based Syrian Observatory for Human Rights, and the outbreaks of violence have occurred in predominantly Druze areas.

Israel has previously said that it would defend Syria’s Druze community from attacks, an offer that many Syrian Druze have rejected. Wednesday’s attack “struck operatives” who “attacked Druze civilians,” the Israel Defense Forces said on X. “Israel will not allow harm to the Druze community in Syria out of a deep commitment to our Druze brothers in Israel,” Prime Minister Benjamin Netanyahu and Defense Minister Israel Katz said in a joint statement.

Cracking down. More than a month after Turkish authorities jailed Istanbul Mayor Ekrem Imamoglu and about 100 other individuals, Turkish President Recep Tayyip Erdogan only appears to be deepening his crackdown on political opposition.

In March, mass protests swept Turkey after authorities arrested Imamoglu—a popular politician and Erdogan’s top rival—on corruption charges just days before he was set to be named the opposition’s presidential candidate. Imamoglu has denied the charges, and the arrest has been interpreted by many as a move by Erdogan to sideline challengers ahead of the country’s next presidential elections.

Turkish authorities this week arrested 18 Istanbul city municipal employees on corruption charges, in what appears to be the latest sign of Erdogan’s broadening clampdown. The 18 individuals were originally detained in a broader group of 52 people who officials linked to the same corruption probe targeting Imamoglu. The other 34 people have since been released.


Odds and Ends

Sheila, a runaway kangaroo with a powerful hop, streaked down a highway in Alabama on Tuesday, stunning drivers and prompting state troopers to shut down the interstate to capture her. That allowed Sheila’s owner, Patrick Starr, to tranquilize her and drive her home. “When somebody said there was a kangaroo, of course I didn’t believe it, and nobody believed it,” local sheriff Andre Brunson said in a Facebook live video, adding: “We see a little bit of everything here.”




Christina Lu is an energy and environment reporter at Foreign Policy. X: @christinafei

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