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Trump’s tariffs echo Hoover-era economic missteps

SUMMARY:

  • Trump’s 2025 caused $11.1 trillion in market losses as of early April.
  • Economists warn trade war could trigger a .
  • Powell and Dimon express serious concerns over and growth.
  • Trump’s approach mirrors Hoover-era Smoot-Hawley policies.

In a January 2024 interview on a MAGA-friendly online platform run by MyPillow Mike Lindell, President Donald Trump said he thought the U.S. was headed for a crash, adding that he hoped it wouldn’t happen during his then-hypothetical second term.

“When there’s a crash, I hope it’s going to be during this next 12 months because I don’t want to be ,” Trump said. “The one president I just don’t want to be [is] Herbert Hoover.”

It’s ironic then that Trump’s first 100 days in office could be confused with an historical reenactment of the Hoover administration. In fact, the president seems to be doing everything short of selling T-shirts and posters of himself decked out in Hoover cosplay.

First, a brief history lesson: Following the 1929 and with the world entering the , Republican Hoover signed the Smoot-Hawley Tariff Act into law in 1930. The GOP legislators who brought forward the protectionist trade law hoped it would boost U.S. manufacturing, but economists and the nation’s business leaders vehemently protested, saying it would bring disaster.

While the trade war initially sparked boosts in domestic production and employment, it ultimately resulted in plummeting exports and employment levels. Other nations either responded with retaliatory tariffs or found alternatives to American goods. The world economy worsened, and Smoot-Hawley has generally been cited as a contributing factor to what made the Great Depression so great.

Now, fast-forward to today: As of early April, Trump’s brief 2025 trade war, with its whipsawing, on-again, off-again tariffs, resulted in the stock market losing about $11.1 trillion in value in just under three months.

Trump has cited various reasons for his trade war, including wanting to bring manufacturing back to America, fixing trade imbalances and responding to other nations’ tariffs on U.S. exports. (He’s also contradicted himself about whether the tariffs are meant to be a negotiating tactic.) None of these are bad goals on their face, but none can also be solved overnight without causing economic chaos.

Richard Foster. Photo by James Lee

On April 2, which he dubbed Liberation Day, Trump unveiled a fierce slate of virtually worldwide tariff hikes, sending the market into a spiral that marked the worst day in trading since 2020. A week later, acknowledging that Americans were getting “a little bit yippy, a little bit afraid” over the trade war’s economic impact, Trump paused most of his reciprocal tariffs for 90 days. But he left in place and ratcheted up tariffs on Chinese goods, some of which now may be as high as 145% to 245%.

During an April 9 Fox Business interview, JPMorgan Chase CEO said that the “likely outcome” of Trump’s aggressive tariffs would be an economic recession. And on April 16, Federal Reserve Chair Jerome Powell remarked that Trump’s tariffs exceeded the Fed’s worst-case assumptions, saying the trade war could lead to higher, prolonged inflation and slower economic growth. Powell also signaled that the situation would prevent the Fed from lowering .

Trump’s response? He complained about interest rates and threatened to fire Powell before the chairman’s term ends.

If only there was some way we could have been warned this might happen. Oh, wait — we were.

The Hill ran a July 16, 2024, editorial titled, “Trump’s tariffs could mirror Hoover’s Depression-era results.” And in October 2024, just ahead of the presidential election, the nonpartisan Tax Foundation think tank published a cautionary essay, “Trump’s Tariff Proposals Would Raise Tariff Rates to Great Depression-Era Levels.” And these were hardly the only voices raising the alarm.

But everyday voters in the 2024 presidential election were largely ignorant about the potential threat and impacts of a trade war, and the business community chose to ignore the issue, preferring to believe that Trump would be more focused in his second term on economic growth and eliminating regulatory hurdles than on waging trade wars and political revenge.

Regardless of your politics, it’s a fact that Trump isn’t interested in preserving the status quo — and that’s a trait for which he’s beloved by his tens of millions of loyal followers.

But he’s also not invested in preserving economic stability, and that’s a problem for business and finance.

Northern Virginia business leaders’ confidence drops in Q2

SUMMARY:

  • business leaders report declining confidence in Q2 2025
  • Only 12% expect to increase hiring, down from 49% in Q1
  • Top concerns include federal layoffs, and tariffs
  • Chamber developing NOVA Roadmap strategy for economic stability

The confidence of business leaders with operations in Northern Virginia declined in the second quarter of 2025, according to a survey released today.

From April 21-25, 298 executives and company owners completed the survey, the second such study conducted by the (NVC) and Pinkston, a Falls Church-based communications firm.

Northern Virginia as a whole is bracing for an economic hit due to ‘s efforts to cut government spending. Since Trump returned to office in January, thousands of federal employees have been fired or put on leave. While continues to trickle in about the regional impact of cuts, we know that in 2023 about 175,000 federal jobs were held by residents of Northern Virginia, according to the Northern Virginia Regional Commission. The unemployment rate for Northern Virginia in March was 3.2%, up from 2.8% in January.A hub for , Northern Virginia will also likely take a hit from Trump’s cuts to federal contracts.

“The findings of this pulse survey reinforce what we’ve been hearing from our membership over the past few months: a significant and growing concern among business leaders regarding the trajectory of our regional , largely driven by the impact of federal actions,” Julie Coons, president and of NVC, said in a statement.

“DOGE is shaking up the Northern Virginia economy more than business leaders originally expected,” D.J. Jordan, senior vice president at Pinkston, stated in a news release. “It’s no surprise that business leaders are pessimistic, considering our region’s reliance on the , however, there are signs within this survey that demonstrate Northern Virginia’s growth in other industries, such as technology and finance. While business leaders are pessimistic about the Northern Virginia outlook overall, there is a silver lining in that they are more optimistic about their own companies.”

The first survey by NVC and Pinkston, conducted in January, reported 60% of leaders queried believed Northern Virginia’s economy would grow over the next six months. This time around, 59% of those surveyed said they believe the region’s economy will decline over the next six months.

That said, more than half of the business leaders surveyed reported being very or somewhat optimistic about their companies’ performance over the next six months. That was a drop, however, from the 81% who expressed optimism in their own operations the first time around.

In the second quarter survey, only about 12% of business leaders expected to increase hiring, while 49% surveyed in the first quarter anticipated needing to grow worker head count. Less than 20% anticipated needing to cut employees in the second quarter, an increase over 6% who anticipated making cuts in the first quarter survey.

A healthy chunk, 43%, of business leaders with Northern Virginia operations expect their company’s capital spending to decrease in the next six months, while 21% of business leaders anticipate increasing capital spending. In the first quarter survey, 54% of leaders planned to increase capital spending.

Issues most impacting business growth, according to the leaders surveyed, are: federal layoffs (63%), inflation (62%) tariff policies (53%) workforce (30%) issues (29%) and federal procurement (27%).

NVC, according to Coons, is developing a report and policy strategy, called the NOVA Roadmap, to address challenges and ensure Northern Virginia’s economic future.

Northern Virginia’s $302 billion gross domestic product represents nearly 42% of Virginia’s gross domestic product and is larger than 24 other states, according to NVC.

Virginia junk fee ban awaits action from governor

SUMMARY:

  • Virginia lawmakers passed a bill requiring junk
  • Gov. Youngkin seeks a 2026 reenactment and exemptions for health clubs
  • Advocates say cost households hundreds annually
  • Governor must act by May 2

Virginia consumers could be free of costly junk fees if the governor signs off on a piece of legislation passed earlier this year. 

Twin bills in the Virginia House and Senate update the Virginia Act and force certain businesses to disclose the total price of services and products before a purchase. All and surcharges tacked on near the end of a purchase would become a transparent part of the advertised price, according to the legislation.

The bills cleared the General Assembly but are stalled at the governor’s office.

sent the bills back with the request to have a 2026 reenactment clause, which means it would go through the same legislative process next year. All 100 seats in the House of Delegates face an upcoming election, which could change the current Democratic majority and possibly sway the bill’s outcome next year.

Youngkin also asked for health clubs to be included in the list of businesses exempt from mandatory fee disclosure.

There was some bipartisan support among lawmakers, who rejected his changes. Now he has until May 2 to take any counter action, such as a veto.

Sen. Stella Pekarsky, D-Fairfax County, introduced Senate Bill 1212 and Del. Adele McClure, D-Arlington, sponsored House Bill 2515. Pekarsky first introduced the mandatory fee disclosure bill during the 2024 session, but it was shot down in the House after passing the Senate.

Pekarsky told the Senate General Laws and Technology Committee they worked on the legislation in the past year to ensure it was clear and understandable.

“This new version of the bill is modeled after legislation that was successfully passed in other states,” Pekarsky said.

 An average U.S. household spends around $650 in junk fees a year on the 10 most dominant industries that use junk fees. In addition to credit card and banking fees, some of the fees are from industries that include airlines, hotels and food delivery, according to a 2024 White House  report.

The amount paid in hidden or “junk” fees could be in the thousands of dollars for a household, according to Ryan O’Toole, the co-executive director of Freedom Virginia, a nonpartisan organization focused on economic security and affordability. These fees only help the industries make extra profit; customers don’t receive any additional benefits for paying these mandatory add-ons, he said.

“Especially in today’s , we feel like the General Assembly, state government, should be doing anything it possibly can to lower the cost of living for the working people,” O’Toole said.

Rhena Hicks, the other executive director, told the Senate panel that transparency is important for consumers making online purchases.

“Virginians deserve honesty and truth in pricing,” Hicks said. “We deserve to know the full cost upfront. Hidden fees undermine trust.”

Youngkin’s substitutes will delay Virginia consumers from making informed financial decisions, according to Jay Speer. He is executive director of the nonprofit Virginia Poverty Law Center, which advocates for low-income residents.

“It just basically says you have to pass the same bill again next year to make it go into law,” Speer said about the reenactment clause. “So it’s just to me another way of vetoing it.”

The governor’s action deadline is 11:59 p.m. on Friday, May 2.

Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.

 

Spire sells maritime business for $241M to Kpler

SUMMARY:

  • completes $241 million sale of its business to Belgian and company .
  • Spire says it used proceeds to retire outstanding debt.
  • The sale resolved a Spire filed against Kpler in February, after Kpler failed to close the sale on Jan. 24.
  • Kpler says the will bolster its capabilities in maritime data and analytics.

-based Spire Global announced last week that it completed its roughly $241 million sale of its maritime business, Spire Maritime, to Belgian data and analytics company Kpler — bringing an end to a legal spat that arose when Kpler initially didn’t go through with the previously announced purchase.

Spire, a space-focused data and analytics company, said the sale was approximately $233.5 million before adjustments, plus a post-close $7.5 million agreement for services over a 12-month period. The company says it used the proceeds of the sale to pay off all outstanding debt and that the remaining proceeds will be used to invest in near-term growth opportunities.

The sale was initially announced in November 2024, with the companies anticipating the sale’s completion during the first quarter of 2025. However, Spire in February filed a complaint with the Delaware Court of Chancery seeking to compel Kpler to complete the sale. In a letter, Spire said that Kpler declined to consummate closing on Jan. 24, the designated closing date under the share purchase agreement.

“Kpler has offered no justification for its failure to close nor identified any unmet conditions to closing, all of which were met or could have been met as of the designated closing date absent Kpler’s breach,” a legal representative of Spire wrote in a Feb. 14 letter to Judge Colm F. Connolly. “Kpler’s ongoing failure to consummate the transaction for over three weeks has already caused significant harm to Spire, and such harm will continue to impact Spire’s business operations for as long as Kpler is allowed to avoid its obligations under the SPA.”

Other court documents redact the reasoning for Kpler’s initial reason for not completing the sale in January. Spire said earlier this month that it reached an agreement with Kpler on April 6 to resolve the and mutually release claims if the closing occurred by April 25.

Neither company immediately returned requests for comment. The case was dismissed with prejudice on April 25, with both companies bearing their own associated costs and attorney fees.

“This milestone marks a significant step forward in Kpler’s mission to deliver decision defining insights across the global trade sector,” said Kpler Mark Cunningham in a statement after the sale was completed. “The addition of this high quality data will unlock greater value for our customers and partners by providing increasingly comprehensive and timely insights into global trade flows. It’s about helping them navigate complexity, uncover opportunities, and make better decisions every day.”

Kpler said the acquisition will bolster its capabilities in maritime data and analytics. The company says it’s working closely with the relevant regulatory authorities and the UK Competition and Markets Authority in light of their review of the transaction.

In the meantime, Kpler said both businesses will continue to operate independently until the review is complete.

Founded in 2014, Kpler is a global company with more than 600 employees in over 35 countries, focusing on providing data and analytic services for global trade. It tracks more than 400,000 ships daily, according to its website.

Spire is a global provider of space-based data, analytics and space services that builds, owns and operates a fully deployed satellite constellation that observes the Earth in real time using radio frequency technology. Data from Spire’s satellites provides global weather intelligence, ship and plane movements and spoofing and jamming detection. Spire has more than 430 employees, with nine offices around the globe.

Professional Services Council names ex-Trump official new CEO

The , the -based trade organization for , has tapped a former official as its next .

James W. “Jim” Carroll, who served as principal deputy chief of staff in the first Trump administration, will step into the role May 19, succeeding David J. Berteau, who is leaving after leading the organization — which has 400 member companies — for more than nine years, according to a news release distributed Friday.

“‘s exceptional track record in public service, corporate governance and policy advocacy makes him the ideal leader to guide into its next chapter,” Zachary Parker, chair of PSC’s board, said in a statement.

Most recently, Carroll was a partner at Frost Brown Todd (FBT), an Ohio-headquartered law firm, and was a principal at its subsidiary CivicPoint, a Tennessee-based firm. From 2018 to 2021, Carroll served as director of the Office of National Drug Control Policy. In that role, he spearheaded efforts to tackle the national opioid crisis and oversaw an annual budget of $35 billion across 16 federal agencies.

During ‘s first term, Carroll also served as principal deputy chief of staff, deputy White House counsel and general counsel of the U.S. Office of Management and Budget.

During the George W. Bush administration, Carroll held various roles, including deputy general counsel and acting general counsel for the U.S. Department of Treasury.

During more than a decade working at the Ford Motor Co., Carroll served as the automaker’s Washington counsel and global director of compliance.

“Throughout our comprehensive search process, Jim distinguished himself not only through his impressive credentials but also through his commitment to collaboration and ethical ,” Babs Doherty, chair of the search committee for PSC’s CEO, said in a statement.

Berteau is leaving, a PSC spokesperson said, “to pursue other ventures.” His last day is May 19.

 

DOJ demands University of Virginia prove it’s dismantling DEI

SUMMARY:

  • U.S. sent letter to administration calling for university to produce report it has dismantled and dissolved initiatives
  • DOJ’s Civil Rights Division gives school a May 2 deadline
  • U.Va. voted to dissolve DEI office March 7
  • DOJ letter says it has received complaints that U.Va. has not made 30-day report public and possibly has not taken action on board’s mandate

Update: U.Va. given May 30 extension of deadline

The ‘s president, rector and university legal counsel received a letter Monday from the U.S. Department of Justice’s Civil Rights Division calling for the university to produce audio and video from a closed session of its board of visitors last month, as well as show evidence that every division of the university and its health system has dissolved and dismantled its diversity, equity and inclusion initiatives, following a board vote in March.

The DOJ’s letter, dated April 28, says its civil rights office has received complaints that U.Va.’s administration has not made public a required 30-day report on its progress in ending DEI operations throughout the university, and alleges that U.Va. “may have failed to implement these directives.” The letter gives U.Va. President Jim Ryan, the university’s rector and legal counsel a May 2 deadline to update the Justice Department’s civil rights office on its progress.

Arriving one day before a Tuesday special meeting of the BOV, during which members voted on a second DEI-related resolution, the letter was signed by Harmeet K. Dhillon, the newly appointed assistant attorney general for the DOJ’s civil rights division and a U.Va. law school alum, as well as Deputy Assistant Attorney General Gregory W. Brown and senior counsel Jeffrey Morrison.

According to the letter, the DOJ issued letters to U.Va.’s undergraduate institution and its law school on April 11 and April 18 regarding admissions practices, “particularly regarding racial preferences” after the U.S. Supreme Court’s 2023 ruling to strike down affirmative action policies in college admissions, as well as executive orders issued by to dismantle DEI “apparatuses and instruments of discrimination based on race, skin color, ethnicity, national origin and other impermissible, immutable characteristics.”

The letter issues a May 2 deadline for the university to produce the official BOV resolution from March 7, “along with all written or electronic records (including audio or video recording) of the … public and closed session meeting and deliberations,” as well as certification that the resolution’s dictates are being enacted at every part of the university, including the UVA Health system and all of U.Va.’s undergraduate, graduate and professional programs and schools.

The letter also calls for “all reports submitted by you or members of your administration” to the board and the rector from around April 7 regarding the execution of DEI dissolution at U.Va.

“Per the directives of the Board of Visitors and that unanimous [March 7] resolution, your office and you were required to report to the Board of Visitors within thirty days, confirming the total elimination of DEI at the University of Virginia,” the letter says, adding that the civil rights department has “received complaints that your office and the university may have failed to implement these directives and further that you have refused to produce the report on the matter.”

The DOJ letter was made public on the C’ville Bubble account on X Monday, the day before U.Va.’s board met in a special session in part to discuss progress on the dissolution of U.Va.’s DEI office and other DEI initiatives.

Also on Monday, The Jefferson Council, a group of conservative U.Va. alumni who have been critical of the university’s particularly over pro-Palestine student protests, claims of antisemitism and free speech issues, posted Ryan speaking in an undated video about the board’s then-upcoming March 7 vote. According to the Jefferson Council’s post, Ryan was addressing the U.Va. Faculty Senate about the DEI resolution.

“The board would like to talk to us about that update,” Ryan says in the one-minute video. “I will say I’m optimistic we’re going to end up in a good place.”

However, the council alleges that “multiple Jefferson Council researchers and allies have had their FOIA requests for the 30-day DEI report denied — a stonewalling that The Cavalier Daily independently encountered as well.”

On Tuesday, board members met at the Boar’s Head Resort off campus and voted for a resolution that says in part that “the University of Virginia has made progress on implementing the directives of the Board of Visitors’ March 7 resolution on diversity, equity and inclusion, and additional work remains to be done to ensure and advance open inquiry at the university and to best prepare students to become citizen-leaders ready to serve our community.”

The resolution also rescinds a September 2020 resolution that “endorsed pursuit of numerical goals for the composition of students and faculty,” a policy that called for U.Va. to hire more faculty from underrepresented racial and ethnic groups, as well as more women in certain fields, and to aim to diversify its student body as well.

Moreover, the April 29 resolution calls for the president, interim provost and an appointee of the U.Va. Faculty Senate to report to the board at its next meeting in June on “work being done to ensure an intellectual climate and campus culture where all students, faculty and staff are able to express politically diverse views, engage in constructive discussion across differences, and respond to competing perspectives in good faith.”

Ryan was among more than 550 university and college presidents and other higher leaders who signed an American Association of Colleges and Universities letter issued April 22 that condemned what they call the Trump White House’s “unprecedented government overreach and political interference,” including threatening to pull approved federal funding for university research and revoking international students’ visas or terminating their legal statuses.

Of the six Virginia presidents who signed the letter, Ryan was the only head of a public university to do so.

U.Va. and the DOJ’s Civil Rights Division did not immediately respond to requests for comment Wednesday.

Amazon holds grand opening for Virginia Beach delivery station

SUMMARY:

  • on Tuesday celebrated the of a 200,000-plus square-foot in
  • Amazon says facility has created 600 direct and indirect jobs.
  • Delivery station is the first in Virginia to get electric delivery vans
  • 650,000 square-foot Amazon in Virginia Beach on track to open later this year

Amazon’s usually known for being on time, but the global e-tail giant waited until this week to hold a grand opening celebration for its 200,000-plus square-foot Virginia Beach delivery station, which has been up and running since September 2024.

The facility, located at 2201 Harpers Road, is Amazon’s 17th delivery station in Virginia and the Fortune Global 500 company’s sixth site in . State and city officials celebrated the opening with a ribbon-cutting ceremony and tour of the new station. Amazon has said it invested about $350 million in Virginia Beach to build the delivery station and a 650,000-square-foot fulfillment center slated to open later this year.

“We’re delighted to welcome Amazon’s newest delivery station to Virginia Beach,” said Virginia Beach Mayor Bobby Dyer in a statement. ” This investment represents not just jobs and economic growth, but also Amazon’s confidence in our city.”

Cory Clark, site lead of Amazon’s Virginia Beach delivery station, said in a statement that the facility has created more than 600 direct and indirect jobs for the community since it opened about eight months ago, ahead of the 2024 holiday season.

“Amazon’s delivery station is a win for Virginia Beach’s ,” said Virginia Beach City Manager Patrick A. Duhaney. “The 600 jobs with competitive wages and benefits are a welcome addition to the Virginia Beach community as a whole. This investment strengthens our city’s position as a prime location for business development and economic growth.”

Amazon delivery station ribbon cutting
Amazon celebrates opening of new delivery station in Virginia Beach on April 29, 2025, with ribbon-cutting ceremony. Photo courtesy Amazon.

first announced that would launch a fulfillment center and delivery station in Virginia Beach in September 2023, and said that both facilities combined would create an estimated 1,000 full-time jobs.

Amazon spokesperson Sam Fisher said the five-floor, highly automated fulfillment center at 1795 Dam Neck Road is on track to open later this year. The company has said it will feature 55 loading docks

When a customer hits ‘buy it now’ on Amazon, that order is processed at a fulfillment center where the items are actually stored. “The item will be picked off a shelf, packaged up and sent off to a middle-mile facility, or what we call a sortation center,” Fisher explained. “From there those items will be sent to a delivery station, like the one we just opened.”

Those items will typically arrive at the station in the middle of the night — around 1 a.m. in the case of the Virginia Beach site. Customer purchases are then unloaded from semi-trailers and sorted into bags to be loaded onto delivery vans.

Fisher said delivery drivers are still being actively hired, and the Virginia Beach delivery station itself will be hiring more people in the days and weeks ahead.

The new station delivers to all of Virginia Beach, downtown Norfolk and east to Virginia Beach, the eastern half of Chesapeake to the ocean, and south to North Carolina.

One unique feature about the Virginia Beach delivery station, according to Fisher, is that it was the first Amazon facility in Virginia to host electric delivery vans.

Since 2010, Amazon has invested more than $135 billion in Virginia, including infrastructure and compensation to employees, and has created more than 42,000 full and part-time jobs. The company says these investments support an additional 195,400 indirect jobs across the state, in fields like construction and professional services.

Weak GDP report tied to tariffs has Trump trying to blame Biden on the state of the economy

WASHINGTON (AP) —  got worrisome news on Wednesday about how the is battening down for potential fallout from his — and he was quick to try to pin the blame on his Democratic predecessor, Joe Biden.

The government reported that the U.S. economy shrank at an annual rate of 0.3% during the first three months of the year. Behind the decline was a surge in imports as companies tried to front-run the sweeping tariffs on autos, steel, aluminum and almost every country. And even positive signs of increased domestic consumption indicated that purchases might be occurring before the lead to price hikes.

Trump pointed his finger at Biden as the stock market fell Wednesday morning in response to the gross domestic product report.

“This is Biden’s Stock Market, not Trump’s,” the Republican president, who took office in January, posted on his social media site. “Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers. Our Country will boom, but we have to get rid of the Biden ‘Overhang.’ This will take a while, has NOTHING TO DO WITH TARIFFS.”

But the gives Democrats ammunition to claim that Trump’s policies could shove the economy into a .

“Trump has been in office for only 100 days, and costs, chaos and corruption are already on the rise,” said Sen. Jeff Merkley, D-Ore. “The economy is slowing, prices are going up, and middle-class families are feeling the pinch.”

The report landed as Trump is trying to put the focus on new corporate investments in the U.S. as he spends the week celebrating his 100th day in office. He planned remarks later in the day on the subject.

Trump’s economic message contains some clashing arguments and dismisses that raises red flags.

He wants credit for an aggressive first 100 days back in the White House that included mass layoffs of federal workers and the start of a with 145% in new tariffs against China. He also wants to blame the negative response of the financial markets on Biden, who left office months ago. He’s also saying his tariffs are negotiating tools to generate trade deals but at the same time banking on hundreds of billions of dollars in tariff revenues to help cover his planned income tax cuts.

Trump highlighted the positive aspects of the GDP report at a Wednesday Cabinet meeting. But that meeting inadvertently revealed how his administration is also trying to take credit for policies that involve the Biden administration as Commerce Secretary Howard Lutnick talked about his recent trip to Arizona to see the Taiwan Semiconductor Manufacturing Co.’s computer chip factories.

TSMC notes on its website that it announced plans in May 2020, during Trump’s first presidency as the coronavirus pandemic disrupted the global economy, to build its first plant in Arizona. It announced a second factory in December 2022, when Biden was in office. After getting up to $6.6 billion in commitments in 2024 from the bipartisan CHIPS and Science Act, TSMC announced plans for a third plant.

Trump dismissed the importance of the government support that Biden made possible for computer chip factories to open domestically.

“They’re building because of the tariffs,” Trump said.

Asked about his tariffs causing , Trump told ABC News in a Tuesday interview that the economy would have eventually imploded if he didn’t impose import taxes on allies including the European Union, Canada, Mexico, Japan, South Korea and India.

“Everybody’s gonna be just fine,” Trump assured.

Democrats’ statements after the GDP report noted how quickly the economy, which still has a healthy 4.2% unemployment rate, appears to lose momentum within weeks of Trump returning.

“In just 100 days, President Trump has taken the U.S. economy from strong, stable growth to negative GDP,” said Heather Boushey, a former member of Biden’s White House Council of Economic Advisers. “This astonishing turn of fortune is directly due to the incoherence of his and his mismanagement of federal policy more generally.”

But White House trade adviser Peter Navarro told reporters that the GDP drop was a “one-shot deal” because of the increased imports, which mathematically subtract from the measure of economic activity. Navarro said that the individual and business income tax cuts planned by Trump would help growth in the months ahead.

“All we’re seeing is good, strong news,” Navarro said. “So the idea that there’s a recession coming should be heavily discounted.”

US inflation cools and Americans step up spending as they brace for tariff impact

SUMMARY:

  • eased to 2.3% in March, down from February’s 2.7%.
  • dropped to 2.6%, with a rebound expected later.
  • rose 0.7%, led by an 8.1% surge in .
  • Fed unlikely to cut rates soon due to tariff and inflation concerns.

WASHINGTON (AP) — A closely watched inflation gauge cooled last month in a sign that prices were steadily easing before most of ‘s tariffs were implemented.

At the same time, consumers accelerated their spending, particularly on cars, likely in an effort to get ahead of the duties.

Wednesday’s report from the Commerce Department showed that consumer prices rose just 2.3% in March from a year earlier, down from 2.7% in February. Excluding the volatile food and energy categories, core prices rose 2.6% compared with a year ago, below February’s 3%. Economists track core prices because they typically provide a better read on where inflation is headed.

The slowdown in inflation could be a temporary respite until the widespread duties imposed by Trump begin to push up prices in many categories. Most economists expect inflation to start picking up in the coming months.

“Core inflation will inevitably rebound sharply in the coming months,” Harry Chambers, assistant economist at Capital Economics, said in an email. “Goods prices will rise much more strongly.”

Chambers expects core inflation will near 4% by late this year.

Wednesday’s report also showed that consumer spending increased 0.7% from February to March, a healthy gain. Much of the increase appeared to be driven by efforts to get ahead of duties, such as Trump’s 25% duty on imported cars, which took effect April 3. Spending on autos surged 8.1% in March. Still, that means auto sales are likely to fade in the coming months because those assets have already been secured.

But spending on restaurants and hotels also jumped after falling in February, a sign Americans are still willing to splurge a little on travel and dining out.

The spending increase is noteworthy because consumer confidence surveys have plunged for several months, suggesting Americans have grown increasingly worried about the . Yet so far, that hasn’t translated into a noticeable slowdown in spending.

Earlier Wednesday, the government reported that consumer spending slowed in the first three months of the year, compared with last year’s final quarter, as bad weather depressed shopping and Americans took a breather after healthy spending over the winter holidays.

The nation’s economy actually shrank 0.3% in the January-March quarter as imports surged as companies sought to get ahead of Trump’s .

Trump benefited in last year’s election from broad dissatisfaction among voters about the steep rise in prices that began in 2021 and that, on average, pushed prices up about 25% by the middle of last year. Grocery costs shot up nearly 30%. As a candidate, Trump said he would immediately lower prices if elected.

Yet the president has slapped 25% duties on steel and aluminum, as well as cars, and a 10% tariff on nearly all other imports. And China, the United States’ third-largest trading partner, now faces a 145% duty on its exports.

The inflation-fighters at the target a 2% inflation rate and pay close attention to Wednesday’s inflation gauge, known as the personal consumption expenditures price index. The better-known consumer price index was released earlier this month and also showed a steady decline.

Inflation figures were revised higher for January and February, leaving price increases in the first quarter higher than previously estimated. The higher figures would likely leave Fed officials wary of cutting rates soon even before taking tariffs into account.

Trump has pushed the Fed to cut its key short-term interest rate because inflation has cooled. But Fed Chair has underscored that the central bank is likely to remain on the sidelines as officials gauge how tariffs will impact the economy. The Fed isn’t expected to lower its rate at its policy meeting next week.

Wall Street bounces back from an early loss as volatility continues

SUMMARY:

  • US GDP unexpectedly contracts, sparking concerns.
  • Dow drops 479 points; S&P 500 and also tumble.
  • AI stocks slide, led by Super Micro Computer’s 17.7% plunge.
  • Tariff uncertainty and weak job data shake investor confidence.

NEW YORK (AP) — U.S. stocks bounced back from steep early losses to end mixed, continuing their wild swings amid uncertainty about what will do to the . The S&P 500 rose 0.1% Wednesday, extending its winning streak to a seventh day. The Industrial Average rose 0.3%, and the Nasdaq composite slipped 0.1%. Indexes started the day lower after a report suggested the U.S. economy may have shrunk at the start of the year, before most of Trump’s announced tariffs could take effect. The S&P 500 had beenb down as much as 2.3%. Treasury yields fell.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — U.S. stocks sank Wednesday after a report suggested the U.S. economy may have shrunk at the start of the year, before most of President Donald Trump’s announced tariffs could take effect.

The S&P 500 was down 0.8% in late trading and on track to break a six-day winning streak. The Dow Jones Industrial Average was down 223 points, or 0.6%, with an hour remaining in trading, and the Nasdaq composite was 1% lower.

The had been heading for much worse losses earlier in the morning, when the S&P 500 was down as much as 2.3% and the Dow dropped 780 points. They initially tumbled after the report on the U.S. economy fell well short of economists’ expectations, a sharp turnaround from the economy’s solid growth at the end of last year.

Importers rushed to bring products into the country before tariffs could raise their prices, which helped drag on the country’s overall gross domestic product.

Such data raises the threat of a worst-case scenario called “stagflation,” one where the economy stagnates yet remains high. Economists fear it because the has no good tools to fix both problems at the same time. If the Fed were to try to help one by adjusting , it would likely make the other problem worse.

“Even if today’s weak GDP may have partially reflected companies trying to get ahead of tariffs, it was still a stagflation warning shot over the bow of the economy,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

Financial markets got some better news later in the morning when a report said the measure of inflation that the Fed likes to use slowed in March. Inflation decelerated to 2.3%, closer to the Fed’s goal of 2%, from February’s reading of 2.7%. Stocks more than halved their losses following the report.

Still, much of Wednesday’s economic data raised concerns about a weakening economy. A separate report on the job market from ADP suggested employers outside the government may have hired far fewer workers in April than economists expected, less than half.

It’s discouraging because a relatively solid job market has been one of the linchpins keeping the U.S. economy stable. A more comprehensive report on the job market from the U.S. government will arrive on Friday.

Wednesday’s reports add to worries that Trump’s trade war may drag the U.S. economy into a . The president’s on-again-off-again rollout of tariffs has created deep uncertainty about what’s to come, which could cause damage by itself.

“I’m not taking a credit or discredit for the stock market,” Trump said Wednesday. “I’m just saying we inherited a mess.”

Uncertainty around Trump’s tariffs has already triggered historic swings for financial markets, from stocks to bonds to the value of the U.S. dollar, that battered investors through April. The S&P 500 at one point dropped nearly 20% below its all-time high set earlier this year, with scary headlines at one point warning of the worst April since the Great Depression.

But the uncertainty has been two-sided, and hopes that Trump may relent on some of his tariffs and reach trade deals with other countries helped the S&P 500 claw back a chunk of its losses. It’s set to finish April with a loss of less than 2%, which would be milder than March’s, and it’s roughly 10% below its record.

Stronger-than-expected profit reports from big U.S. companies have helped support the market, and Seagate Technology jumped 9% for one of Wednesday’s biggest gains after the maker of data storage joined the parade.

But potentially discouraging trends within the artificial-intelligence industry helped offset such gains for storage makers. AI stocks have been pulling back sharply on worries that their prices shot too high in prior years, when a frenzy around the industry drove them to breathtaking heights.

Super Micro Computer warned that some customers delayed purchases in the latest quarter, which caused the maker of servers used in AI and other computing to slash its forecast for sales and profit. Its stock tumbled 14.3% for the largest loss in the S&P 500.

Other AI-related stocks also fell, including a 1.3% drop for Nvidia. Because the chip company is so huge in size, its loss was one of the single heaviest weights on the S&P 500.

Starbucks sank 6.9% after the coffee chain fell short of analysts’ forecasts for revenue and profit in the latest quarter. Starbucks did log its first quarterly sales increase in more than a year, but acknowledged that its turnaround effort is far from complete.

Wednesday is set to mark the close of a third straight losing month for the S&P 500. Stocks in the energy industry took some of the hardest hits, dropping over three times more than any of the other 11 sectors that make up the index.

Halliburton, an oil services company, lost more than 22% in April as the price of crude slid on worries that tariffs will weaken the global economy.

In the bond market, Treasury yields held relatively steady Wednesday. The yield on the 10-year Treasury eased to 4.17% from 4.19% late Tuesday.

Yields have largely been sinking since an unsettling, unusual spurt higher earlier this month rattled both Wall Street and the U.S. government. That rise had suggested investors worldwide may have been losing faith in the U.S. bond market’s reputation as a safe place to park cash.

In stock markets abroad, indexes finished mixed across Europe and Asia.

Notes: Eds: UPDATES: with close of US trading.