The US economy grew at a slower rate in the last three months of 2024, according to updated government data released on Thursday, March 27. The Commerce Department’s Bureau of Economic Analysis (BEA) reported that the country’s Gross Domestic Product (GDP) increased by 2.4% on an annual basis. This is a drop from the 3.1% growth seen in the previous quarter.
Although this new figure is slightly better than the earlier estimate of 2.3%, it still shows that economic growth is slowing down. Businesses and consumers are facing uncertainty due to government policies and external challenges.
Why Did Growth Slow Down?
The decline in GDP was mainly due to lower imports, which usually reduce economic growth. However, consumer spending and government spending helped keep the economy stable. On the other hand, a drop in private investment weakened overall growth.
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Impact of Trump’s Tariffs
Concerns are rising about the possible effects of President Donald Trump’s new trade policies. Analysts at Barclays warn that his proposed tariffs could make it harder for businesses to plan and could lead to lower consumer spending, further slowing the economy.
On Wednesday, March 26, Trump announced a 25% tariff on imported cars, fulfilling his promise to penalize foreign car manufacturers. The White House calls these “reciprocal” tariffs, meaning they are meant to balance trade with other countries. The tariffs will take effect on April 2, and the government will start collecting them the next day.
Different Opinions on Tariffs
Trump believes these higher tariffs will help cover losses from planned tax cuts and bring back more manufacturing jobs to the US. However, critics argue that other countries may retaliate with their own tariffs, leading to weaker trade relationships and slower economic growth.
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As businesses and consumers adjust to these changes, experts are keeping a close eye on how the economy will respond in the coming months.
