&imwidth=800&imheight=600&format=webp&quality=medium "US economic growth falters as Trump’s tariffs and wars hit fourth quarter estimates")
The US economy missed 4th quarter growth estimates for 2025 with a significant margin as it grew at a modest 0.7 per cent, government data showed on Friday (Mar 13), marking a major downgrade amid fears of fallout from war in West Asia looms, and Washington's trade ties remain in flux in the aftermath of President Trump's trade war.
The October to December quarter growth is sharply down from earlier estimates of 1.4 per cent, suggesting that the world's biggest economy was on a weaker footing than anticipated ahead of US-Israeli strikes targeting Iran on February 28, leading to spillover of war across the oil rich gulf region.
The crude witnessed a steep rise to reach nearly $115 per barrel last week and remained near $100 on Friday due to pressure from the closure of the Strait of Hormuz by Iran, which accounts for shipping of around one-third of the world's oil supply.
In the fourth quarter, the growth adjustment reflected "downward revisions to exports, consumer spending, government spending, and investment," the Commerce Department said.
The poor growth figures came as Donald Trump completed one year in office after returning to White House, sparking fears of a cooling job market and rising inflation in the United States. However, the full-year growth figures stand at 2.1 per cent, marginally lower than earlier estimates of 2.2 per cent.
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President Trump was quick to jump the gun to blame the opposition for the lengthy government shutdown late last year for the slowdown in growth when early estimates were released last month.
Trump, who touted himself as the most suitable candidate to lead the US economy, initiated a sweeping tariff war in April 2025 shortly after his inauguration. Dubbing the move "Liberation Day," he announced a slew of reciprocal tariffs on dozens of countries, citing the massive fiscal deficit and unfair trade practices. At the time, he claimed that Washington would ink major new trade deals within 90 days. However, even after nearly 11 months, the US has only been able to sign a handful of deals with smaller nations and mid-sized economies like Indonesia, while negotiations with major powers remain stalled.
A major shock to Trump's policies came in February 2026 when the US Supreme Court ruled that his use of the International Emergency Economic Powers Act (IEEPA) to impose those tariffs was unconstitutional. The 6-3 decision struck down the core of his trade agenda, plunging firms and international partners into a period of deep uncertainty regarding their trade relations with Washington.
With the mid-term elections approaching, Trump’s recent policy reversals and failure to deliver on key promises, including his high-profile vow to settle the Russia-Ukraine war in "24 hours" and his commitment to ending "endless wars" abroad, could potentially lead to significant setbacks for the Republican Party at the polls.
