Trump economy expands, defying ‘panicans’ who predicted tariff recession

When President Trump launched his global trade war in April, his critics insisted that his protectionist agenda was doomed to failure. Tariffs, they said, would cripple international trade and send the U.S. economy into a recession.

But months later, the predictions of the “panicans” have been proven wrong, and Trump has something to brag about.

According to the latest government data, the GDP increased at a steady 3% in the three months ending in June, beating the expectations of most economists.

What happened?

The rebound was fueled by consumer spending, but “primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP,” the Commerce Department said.

The economic expansion comes after a small contraction in the first quarter – less than one percent – that led Trump’s critics to say he was leading the country into a recession.

Trump celebrated the second-quarter report, which came out shortly before the Federal Reserve announced that it will keep interest rates unchanged despite Trump’s wishes to slash them.

The president has been pressuring Federal Reserve Chairman Jerome Powell – whom Trump calls “Too Late” – to hurry up and lower interest rates, which would stimulate the economy and ease housing costs.

“2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! ”Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” Trump said.

The Fed’s vote was controversial, with two members voting to lower rates – the first time in three decades that two Fed governors have dissented.

Trump defies critics

Trump’s initial “Liberation Day” tariff rollout caused widespread alarm, with critics – whom Trump nicknamed “panicans” – predicting massive inflation and an economic downturn.

So far, corporations have been eating the tariffs, sparing American consumers the brunt of added costs. Inflation remains controlled and well below its Biden-era peaks, and the job market is holding steady.

On top of it all, the U.S. economy is actually growing, according to the one figure that economists care about most: the GDP. Even still, Trump’s critics are unconvinced, insisting more time is needed to fully assess the impact of Trump’s protectionist agenda.

“We think we have a long way to go to really understand exactly how” the tariffs will work out, Powell said Wednesday.

The tariffs are also generating billions in new government revenue, and Trump has successfully used tariff pressures to negotiate new trade agreements, including a major deal with Europe that is highly favorable to the United States.

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