Trump says it's Biden's economy, but businesses and economists beg to
differ
[May 02, 2025] By
PAUL WISEMAN and CHRISTOPHER RUGABER
WASHINGTON (AP) — When the stock market was climbing in January 2024,
Donald Trump knew exactly who deserved credit: He did.
Nearly a year before his return to the White House, he declared on his
Truth Social platform that investors were celebrating his lead in the
polls against President Joe Biden.
When the stock market fell Wednesday on news that the American economy
had gone backward during the first three months of 2025, Trump knew
exactly who to blame: Biden.
“This is Biden’s Stock Market, not Trump’s,’’ he posted, adding that
Biden “left us with bad numbers, but when the boom begins, it will be
like no other. BE PATIENT!!!’’
Trump also said, “Our Country will boom, but we have to get rid of the
Biden 'Overhang.' This will take a while, has NOTHING TO DO WITH
TARIFFS.”
Yet for economists puzzling out how prices and hiring will change in the
coming months, or businesses struggling with a starkly uncertain future,
Trump's massive and unpredictable import taxes on almost every country
do in fact bear much of the blame. Rarely have a new president's
policies had such a sharp, immediate impact on the economy.
To Georgia Tech University’s Mark Zachary Taylor, who studies the
economic policies of the American presidents, Trump’s assertions sound
like a brazen double standard. “He cannot have it both ways,’’ Taylor
said by email, “though he always tries.’’
Trump’s attempt to shift blame for bad economic news to his predecessor
raises a question: At what point in a four-year term does a new
president assume responsibility for the economy’s performance?
Commerce Secretary Howard Lutnick has said in interviews that the
benefits of Trump’s policies will be felt in the second half of this
year, particularly in the fourth quarter.
And Taylor notes that for a typical president, “it might take six months
to two years for us to accurately call the economy ‘theirs.’”
But the threshold is different for presidents who enter the White House
with big ambitions to reshape the economy from the get-go.
“The more boldly an incoming president acts (and the stronger his
Congressional support), the sooner the economy becomes ‘his,’ ” Taylor
said.
The most notable example is President Franklin D. Roosevelt, who pushed
through major legislation — including a bill that effectively
established deposit insurance to calm a banking crisis – to combat the
Great Depression during his first 100 days in office. Presidents Ronald
Reagan and Barack Obama also entered office during economic crises and
moved swiftly to deal with them.
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 But even they did not move the
economic data as quickly or sharply as Trump. On Wednesday, the
government reported that imports surged 41%, the biggest jump —
excluding the pandemic — since 1972. Companies rushed to bring in
goods in the first quarter to beat the impending tariffs.
The flood of imports pulled down growth, under the government's
accounting, and the economy shrank 0.3% at an annual rate, the first
decline in two years. The negative showing is what prompted Trump's
Biden-bashing post on Wednesday.
The figures are "exactly what one would expect from millions of
American businesses and households trying to get ahead of looming
tariff hikes,’’ Taylor said, adding that Trump’s trade war is also
responsible for the slumping stock market and a drop in the value of
the dollar.
Surveys show that manufacturers are receiving fewer orders and that
their production is falling. On Thursday, the Institute for Supply
Management, a trade group of purchasing managers, released its
monthly survey of manufacturers, which typically includes a
selection of comments from its membership.
Typically, the comments reflect the individual concerns of a
specific industry, whether chemicals, electronics, or clothing
makers. In April's report, all 10 comments — every single one —
focused on tariffs.
“Tariffs impacting operations — specifically, delayed border
crossings and duties calculations that are complex and not
completely understood,” one company in the transportation equipment
sector said. “As a result, we are potentially overpaying duties.”
Trump has blown up the existing world trade system by slapping 10%
import taxes – tariffs – on friends and foes alike in the name of
bringing back jobs to the U.S. He’s plastered 145% tariffs on China,
drawing retaliation from Beijing that threatens to end trade between
the world’s two largest economies. He’s also hit foreign steel,
aluminum and autos.
The erratic way he’s rolled out his protectionist policies –
introducing, then suspending tariffs, then announcing new ones – has
left companies, consumers and investors bewildered. The S&P 500
stock index has dropped 7% since just before Inauguration Day Jan.
20. And consumer confidence has wilted.
“Some of what you are seeing right now is purely Trump related,’’
said Columbia University’s Joseph Stiglitz, a Nobel Prize-winning
economist and chair of the White House Council of Economic Advisers
in the Clinton administration. “No one can look at what is going on
in the economy without saying the on-again, off-again tariffs are
not having an impact.
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