By Josh Bork
WASHINGTON (AP) — President Donald Trump on Wednesday admitted that his tariffs could bring fewer and more expensive products in the United States, saying American children might “have two dolls instead of 30 dolls,” but he argued that China would suffer a trade war.
The Republican president tried to reassure the nervous country that his tariffs would not cause a recession after a new government report showed that the US economy had contracted in the first three months of the year.
Trump quickly took responsibility for his Democratic predecessor, Joe Biden, as his tariffs meant that China “has been experiencing tremendous challenges because factories are not doing business, and that the US really doesn’t need imports from the world’s dominant manufacturers.
“You know, someone said, ‘Oh, the shelves are open,'” Trump continued, putting out the hypothesis. “Well, maybe the kids have two dolls instead of 30 dolls. So the two dolls will be a few dollars more expensive than normal.”
His remarks followed a defensive morning after the Commerce Department reported that the US economy had contracted at 0.3% annually in the first quarter. There was a surge in imports as businesses tried to frontline tariffs that had been wiped out in cars, steel, aluminum, and almost every country. And even a positive indication of increased domestic consumption showed that purchases could occur before import taxes could lead to price increases.
Trump turned his finger at Biden as the stock market fell Wednesday morning in response to the GDP report.
“This is Biden’s stock market, not Trump’s stock,” the Republican president, who took office in January, posted on a social media site. “Taxes are kicking quickly, and businesses are beginning to move to the US in record numbers. Our country is booming, but we need to get rid of Biden’s Overhan.” This takes a while and has nothing to do with tariffs. ”
But the GDP report gives Democrats ammunition that Trump’s policies claim could put the economy in a recession. A Democrat statement after the GDP report noted how fast the economy is with a 4.2% unemployment rate still healthy and appears to have lost momentum within weeks of Trump’s return.
“We only saw the beginning of dangerous consequences from Trump’s random policies,” said Washington State Rep. Suzan Delvene. She said US manufacturers still rely on Chinese parts and components to assemble the final product, and Trump’s approach to trade reflects the misconception of the investment and certainty that domestic companies need to build more factories and create jobs.
“Chaos and dysfunction don’t help build investments,” said Delvene, who leads House Democrats’ Congressional Campaign initiatives. “A strong economy requires stability and certainty. We’re not looking at that.”
The GDP report has landed as it seeks to focus on new corporate investments in the United States as it spends the week celebrating Trump’s 100th day in office. He planned a comment on the matter later that day.
Trump’s economic message includes several conflicting arguments, dismissing data raising the red flag.
He hopes for a major layoff of federal workers and the offensive first 100 days at the White House, including a massive layoff of federal workers and the launch of a 145% trade war with new tariffs on China. He also wants to condemn Biden’s negative financial market response, which he took office a few months ago. He also says that his tariffs are a negotiation tool to generate trade transactions, while also banking banks with hundreds of billions of dollars in tariff revenue to cover his planned income tax cuts.
Trump highlighted the positive aspects of the GDP report at the Cabinet meeting. However, the session revealed that his administration is trying to trust the policies involved in the Biden administration.
Commerce Secretary Howard Lutonic spoke about his recent trip to Arizona about looking at the computer chip factory at a Taiwanese semiconductor manufacturer. The company notes on its website that in May 2020, it announced plans during Trump’s first term in office, when the coronavirus pandemic destroyed the global economy to build its first factory in Arizona. The company announced its second factory in December 2022, when Biden took office. After garnering a commitment of up to $6.6 billion from the bipartisan Chip and Science Act in 2024, TSMC announced plans for its third factory.
Trump has dismissed the importance of government support that allowed Biden to open up the country for computer chip factories.
“They’re building for tariffs,” Trump said.
But Democrats are quick to say that Trump inherited the economy in a stable process with low unemployment and that his tariff plans quickly inherited the economy due to a decline in inflation that was destroyed.
“In just 100 days, President Trump has taken over the US economy from strong and stable growth to negative GDP,” said Heather Boosy, a former member of Biden’s White House Economic Adviser Council. “This surprising property shift is more common due to contradictions in his economic policy and mismanagement of federal policies.”
But White House trade adviser Peter Navarro told reporters that the decline in GDP is a “one-shot transaction” due to an increase in imports, and will mathematically subtract from a measure of economic activity. Navarro said Trump’s planned personal and business income tax cuts would help grow in the coming months.
“All we’re watching is good, strong news,” Navarro said. “So the idea that a recession is coming should be greatly discounted.”
Original issue: April 30th, 2025, 12:21pm EDT
