Earlier today President Trump held a cabinet meeting with the heads of all executive agencies. Following the meeting, President Trump invited the press into the cabinet meeting room where he answered media questions. WATCH:
.
This next story is a natural outcome in the flow of goods. Remember, the Bureau of Economic Analysis (BEA) of the first quarter is a hindsight review. Meaning the information released today was based on activity in January, February and March 2025.
U.S. companies surged the purchasing of import goods, mostly from China, by more than 50% in the first quarter. They were/are building inventory. So, what happens in China starting in April?
Hong Kong, CNN – China’s factory activity contracted at its fastest pace in 16 months in April, as steep US tariffs took a heavy toll on the manufacturing sector, adding urgency to Beijing’s efforts to roll out fresh economic stimulus.
The manufacturing Purchasing Managers’ Index (PMI) fell to 49.0 in April, the weakest reading since December 2023, according to data released by the National Bureau of Statistics (NBS) on Wednesday. A reading below 50 signals a contraction.
Zhao Qinghe, a senior statistician at the NBS, said in a statement that the contraction in factory activity was due to “sharp changes in the external environment and other factors.” (read more)
The U.S. has front-loaded the inventory. So, orders to China drop now. It’s a natural outcome.
We have purchased goods in advance. So, orders to China drop. As a result, the cargo shipments from China to the USA drop in April, May and June.
It’s not that U.S. consumers don’t have the product to purchase; the reality is the product is already here, awaiting purchase.
However, to retain an oppositional perspective toward Donald Trump, the media narrative will not look back at the 50% surge in first quarter purchases; they will only look at the severe drop in second-quarter orders.
With less being ordered, the media will now say the Trump tariffs are hurting consumers, deliveries to ports are substantially less, without ever mentioning the products are already here.
On the upside, there will be a massive rebound in Second Quarter GDP as the imports have dropped; meaning there is less to deduct. However, we will not see that statistically until the last Friday in July.
[…] Chinese Foreign Minister Wang Yi dismissed calls for a negotiated tariff truce with Washington, saying appeasement in the face of US threats will only “embolden the bully.” His comments on the sidelines of a meeting in Rio de Janeiro echoed the message in a striking social media video shared by his ministry calling on the international community to stand up to America’s “bully” leader.
In an interview that aired on Tuesday, Trump said China “deserved” the 145% tariffs that he imposed, claiming Beijing would absorb them.
“China probably will eat those tariffs. But at 145, they basically can’t do much business with the United States,” he said in an interview with ABC News.
The absolute key to the first quarter GDP result is to remember that ‘imports‘ are a deduction in the economic equation of Gross Domestic Product. The GDP is the valuation of all goods and services produced in the USA *minus* the value of imports.
The Bureau of Economic Analysis (BEA) releases the results of the first quarter GDP. The overall economic growth seems low at –0.3% until you look at how U.S. companies responded in February and March to the tariff announcement.
Companies proactively purchased massive amounts of products in advance of the tariffs leading to an overall increase in imports of 41.3%. Which results in a 5.3% deduction to GDP. Every dollar of those imports is a deduction to the GDP equation, giving the false appearance of lower domestic production.
There was a massive surge in import goods purchases of 50.9% versus the prior period [Table 1, line 20]. That’s the largest periodic increase in import purchases I have ever seen. Simultaneously, fixed asset investment in equipment for domestic production surged 22.5% [Table 1, line 11].
Put both of these metrics together and what you see are U.S. companies building consumer inventory from overseas (imports) while simultaneously preparing themselves to shift production into the USA. The massive import purchases are a bridge to cover the time needed to shift the manufacturing from overseas to the USA. This is exactly what we want to see.
To give more detail to the economic shift, we turn to Table 2 and look at the contribution impact to the GDP equation.
Here we can see that imports surged and led to a 5.03% deduction to the GDP equation. Meaning if all things were equal without the Q1 surge in import purchases the GDP would have been +5.0%.
Meanwhile the impact of federal spending decreased 0.33% as President Trump makes the federal government smaller, and federal spending contribution less. The federal government is getting smaller as a percentage of GDP. Again, a very positive sign.
Investment in the USA is high. MAGA working.
Imports are temporarily high, as companies prepare to purchase less from overseas. MAGA working.
Following the increase in U.S. investment and following the increase in equipment purchasing; we will see an increase in jobs as a result of hiring Americans to use the equipment and create the products. If the workforce tightens up (illegal alien deportation continues) and unemployment lessens, then pressure is created on wage rates as companies compete for workers. Main Street starts winning again.
Attach welfare support to employment efforts and the dependency model shrinks.
This is very good news all around.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
De Oppresso Liber
A group of Americans united by our commitment to Freedom, Constitutional Governance, and Civic Duty.
Share the truth at whatever cost.
De Oppresso Liber
Uncensored updates on world events, economics, the environment and medicine
De Oppresso Liber
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
Australia's Front Line | Since 2011
See what War is like and how it affects our Warriors
Nwo News, End Time, Deep State, World News, No Fake News
De Oppresso Liber
Politics | Talk | Opinion - Contact Info: stellasplace@wowway.com
Exposition and Encouragement
The Physician Wellness Movement and Illegitimate Authority: The Need for Revolt and Reconstruction
Real Estate Lending
Centinel2012 