We at Unleash Prosperity love growth, so we’re pleased as peacocks that the GDP grew by 3% in Q2 of 2025. But as the chart below from the Commerce Department shows, the major factor driving the growth was a big decline in imports. And that was almost certainly due to Trump tariffs.
But some of us have been questioning for decades why imports are counted as “bad” for the economy. Imports rise when Americans have a high enough income to buy them. The fact that they have declined is no measure of prosperity.
We’re disappointed in the investment number, which was negative. You can’t have growth without investment. The good news is that Trump is attracting foreign capital at record amounts – and those commitments weren’t included in this April-July tally. Those investments will show up later.
We are glad to see private sector growth outpaced government growth. Government consumption expenditures were basically flat. But in the Biden years, an outsized amount of the paltry “growth” recorded was due to the multitrillions of government outlays (all financed with debt), which drove artificial growth.