As President Donald Trump approaches the first 100 days of the second term, his promise of “golden age” US economic prosperity is under fire. A new Commerce Department report of first quarter 2025 GDP contracting by 0.3% has disrupted the White House narrative of record prosperity. Coupled with President Trump’s own admission that his “trade war with China” will translate to “fewer toys” and more expensive ones, US consumers, the distance between president and reality is increasing, with doubts emerging on how long his “Make America Wealthy Again” agenda can be maintained.
A sobering economic indicator
The April 30, 2025, GDP report is the first major economic setback during Trump’s second term. While the decline is modest and there are glimmers of strength in some of the underlying indicator—increasing investment, for example—the political and symbolic dimensions run deep. Trump’s campaign in 2024 was built in part on his image as a good businessman who is capable of pushing the economy to new heights. A slowing-down economy, even if transient, has the power to break that aura, particularly with the White House fighting to salvage its record of achievement.
In a Cabinet meeting on April 30, Trump swung between boasting about the achievements of the administration and conceding the potential sting of his trade policy. “Maybe the kids are gonna have two dolls instead of 30 dolls, and maybe the two dolls will be two dollars more,” he said of the impact of his expanding trade war with China. The comment, though offhanded in language, was rare acknowledgement of the cost that Americans will bear as tariffs cut off the flow of cheap goods. It also highlighted the disconnect: A president who is himself worth billions and advised by high-earners may struggle to connect with blue-collar households that will have to shell out more.
The China Trade War: A Risky Gamble
Trump’s aggressive trade policy, and particularly imposing a 145% tariff on Chinese imports, is the flagship of his economic agenda. He sells it as medicine for decades of globalization that sucked the life from American manufacturing towns, taking away their factories. Rollout of the policy has been chaotic, with minimal evidence of planning or specific measures of achievement. The GDP slump was prompted by a spate of imports as companies stockpiled products before tariffs increased, evidence of an economy getting ready to be disrupted and not booming.
Trump’s claim that ships are returning from U.S. docks carrying Chinese goods once more may be a short-term victory in his battle with Beijing, but foretells shortages and inflation to come. From textbooks to consumer electronics, Chinese addiction to products has kept prices low for millions of Americans. Break this supply chain, and blue-collar families will feel the hit the hardest—the same blue-collar families whom Trump promised to speak up for. His declaration that Chinese President Xi Jinping is in “intense discussions” rings hollow, and the administration’s history of hyperbolic announcements has lost credibility on the issue.
Shifting the Blame, but Controlling the Economy
Donald Trump reacted on Truth Social to the GDP report by saying, “This is Biden’s Stock Market not Trump’s” and attributing the slowdown to the policies of his predecessor. It is traditional that new governments point the finger of responsibility towards theirs, but there is less substance in Trump’s case. His unannounced tariffs and destabilizing trade policies have brought uncertainty into markets, suffocating investor and consumer confidence. As one commentator noted, “The day Trump stood in the Rose Garden with his tariff scoreboard, he took ownership of the economy.”
The stock market has been unstable, and the 401(k) accounts have been battered—a particular cause of concern among retirees and soon-to-be retirees. Trump’s first 100 days were characterized as perhaps “the least successful in the last 100” by ex-Secretary of the Treasury Larry Summers, citing decreasing stock prices, decline of the dollar, increasing jobless predictions, and the sinking of consumer confidence. These are all in opposition to the White House description of the roaring economy.
Political and Foreign Policy Implications
The downturn represents considerable political danger to Trump. His tenuous House majority relies on GOP unity in an effort to drive through ambitious budget and tax plans, like what he has called “big, beautiful” reforms. A persistent storyline of economic woe might spook Republican legislators and endanger splitting party unity. And meanwhile, already weakening consumer confidence is at risk of further deterioration if the perception of tough times takes hold, with the potential to induce a self-fulfilling recession.
On the global stage, Trump’s sagging approval ratings can erode his negotiating leverage in trade negotiations. Foreign leaders, sensing political vulnerability, will be emboldened to hold out against American demands, making it more difficult to secure favorable deals. The world is watching not only Trump’s policies, but his ability to maintain domestic support for them. If his economic bet doesn’t pay off, it could embolden competitors and undermine America’s bargaining position.
A White House Isolated from Reality
Inside the White House, efforts to shield Trump from criticism have intensified. Cabinet officials like Attorney General Pam Bondi showered him with praise, saying he has better first-100-day history than any president in history. White House press secretary Karoline Leavitt dismissed reports that Amazon will flood buyers with tariff costs as “hostile and political.” Trade adviser Peter Navarro described the GDP report as “the best negative print” he’d ever seen, and while Trump boasted of good stats like investment growth and dodging responsibility for bad figures.
This divergence signals that communications strategy is more in tune with keeping Trump’s spirits up than with responding to the public’s concerns. Sycophancy and denial by the administration promise to leave the president ill-prepared to handle what lies ahead, particularly as economic harm caused by his policies becomes increasingly hard to deny.
