Trump's Top Trade Advisor Calls Q1 GDP Dip As 'Best Negative Print I Have Ever Seen,' Points To Silver Linings

White House trade adviser Peter Navarro downplayed the first-quarter GDP contraction, calling it the “best negative print” he’s seen and attributing the dip to a surge in pre-tariff imports rather than underlying economic weakness.

White House trade adviser Peter Navarro on Wednesday downplayed concerns over a surprise U.S. economic contraction in the first quarter, attributing the weakness to a tariff-driven surge in imports and highlighting underlying economic strength.

After the Commerce Department reported a 0.3% annualized contraction in Q1 gross domestic product (GDP), Navarro told CNBC that it was the “best negative print I have ever seen in my life,” pointing to a 22% jump in domestic investment. 

He argued that, stripping out inventory drag and the 41% spike in imports ahead of new Trump tariffs, the economy effectively grew by 3% in the quarter.

The contraction — marking the first full quarter of President Donald Trump’s second term — was largely attributed to businesses front-loading purchases in anticipation of broader trade restrictions. 

That led to a record trade deficit, subtracting an estimated 4.8 percentage points from headline growth.

Trump blamed the downturn on residual effects of the Biden administration, reiterating that the “Biden overhang” would be cleared out in the coming months and that tariffs were not to blame. 

The president has maintained that the long-term impact of his trade agenda will be positive, with tariffs intended to rebalance global trade and boost domestic manufacturing.

Despite early selling on the GDP print, U.S. equity markets staged a late-session rebound. 

On Wednesday, the Dow Jones Industrial Average rose 141.74 points, or 0.35%, to close at 40,669.36. The S&P 500 gained 8.23 points, or 0.15%, to 5,569.06, while the Nasdaq Composite slipped 14.98 points, or 0.09%, to 17,446.34. 

Earlier in the day, the three indexes had fallen as much as 1.9%, 2.3%, and 2.9%, respectively.

Still, the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, and the Invesco QQQ Trust, Series 1 (QQQ), which tracks the Nasdaq Composite, are down over 5% this year.