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55m ago

U.S. GDP Rebounds to 3.3% on Trade Swing as India Posts 7.8% Q1 Surge Before Tariff Test

Tariff policy is reshaping growth metrics, with near-term risks building.

Transport trucks carry cargo containers to be loaded on the Hapag-Lloyd container ship Frankfurt Express at the DP World Centerm terminal at port, in Vancouver, on Sunday, August 3, 2025. THE CANADIAN PRESS/Darryl Dyck
India's GDP

Overview

  • The Commerce Department’s second estimate showed U.S. Q2 growth at a 3.3% annualized pace, lifted by an outsized trade contribution after a tariff-driven import reversal.
  • Imports fell 29.8% as firms unwound Q1 stockpiling, pushing net exports to add nearly five percentage points, while consumer spending rose 1.6% and business investment 5.7%.
  • Final sales to private domestic purchasers increased 1.9%, a demand gauge closely watched by the Federal Reserve, as markets continued to price a near-term rate cut.
  • India’s National Statistical Office reported 7.8% GDP growth in April–June, the strongest in five quarters, with real GVA up 7.6% on services strength, solid manufacturing and higher government outlays.
  • The U.S. doubled tariffs on many Indian goods to as high as 50%, and economists estimate a potential 0.6–0.7 percentage-point hit to India’s growth if maintained, with pressure on labor‑intensive exporters such as textiles and jewelry.