The United States saw its trade deficit surge to a record $140.5 billion in March, raising concerns about the impact of tariffs on the nation’s economy. Businesses rushed to import goods ahead of sweeping tariffs, contributing to the massive trade gap.
This surge in imports dragged down the Gross Domestic Product (GDP), causing the economy to shrink by 0.3% in the first quarter of this year. It’s the first contraction since early 2022, marking a significant shift in economic momentum.
Consumer spending, a key driver of the US economy, also showed signs of slowing down. The first quarter saw a modest gain of just 1.8%, the slowest increase since the second quarter of last year.
The combination of a widening trade deficit and slowing consumer spending has raised questions about the effectiveness of tariff policies. As businesses and consumers adjust to these changes, the impact on the global economy, especially in the Global South, remains to be seen.
