A Republican Congressman has warned that rates have a major impact on the economy of his state.
“We are now in a troubled time,” Nebraska representative Don Bacon told CNN on Monday.
“And to be honest, in Nebraska, GDP has fallen by 6 percent here last year,” he continued. “And it’s all about trade. It’s all about taking corn and soybeans out of the door.”
Why it matters
This year, rates have not yet made a consecutive dents in the economic growth rate of America, with the GDP in return in the second quarter due to an import -driven contraction in the first. Extra deferment has been provided by the temporary scale of the tasks of China and that rate -reducing trade agreements are concluded with a handful of nations.
However, many economists still expect that the rates will create a headwind for the US economy in the coming months, with certain states – which are dependent on import and vulnerable to any mutual actions – have expected to feel a big impact.
What to know
Bacon, a central member of the GOP and frequent critic of President Donald Trump’s trade policy on both economic and constitutional grounds, seemed to refer in June to the first quarter of the GDP growth figures, whose estimates of the state were released by the Bureau of Economic Analysis (Bea) in June.
In addition to Iowa, the decrease of 6.1 percent of Nebraska was the worst in the nation. This is compared to a national decrease of 0.5 percent, with 39 states seeing contractions in the period.
“What we see is actually a recession economy in Nebraska and Iowa at the moment,” Bacon said in a separate interview.
Agriculture plays a central role in the economies of Nebraska and Iowa, which belong to the leading national producers of corn, soybeans and wheat. Farmers and agricultural experts who spoke Newsweek Recently said that the rates could further burden the already narrow margins of the sector, both due to the negative impact on raw materials and potential retaliation actions that damage their exports.
Chris Machian/Omaha World-Herald via AP
The US GDP recovered strongly in the second quarter and increased with a better than expected annual rate of 3.0 percent according to the advanced estimates of last week of the Bea. The agency said that this was “a decline in import and an acceleration of consumer spending.”
July 29 also saw the International Monetary Fund (IMF) upgrading its worldwide growth reasons, due to a weaker dollar, the extensions that were placed on tariffadlines and a general decrease in the expected effects of the “trade shock”. The US belonged to the countries to see an upgrade, the GDP growth reasons for both 2025 and 2026 rose by 0.1 percent.
What people say
President Donald Trump, who responds to last week’s GDP growth said: “The number of 3 percent – the pace in the second quarter – we made all the expectations. They thought it might be a little less than 2, and it was 3, a little more than 3.”
White House Pers Secretary Karoline Leavitt said: “Today, GDP growth rose above market expectations and yesterday, Consumer confidence rose. Americans rely on President Trump’s first economic agenda who continues to prove the so -called ‘experts’. President Trump has reduced the dependence on America on foreign products, raised investments in the US and created thousands of jobs – his promise to make America rich again. “
Thomas Sampson, a professor of economics at the London School of Economics, said Newsweek That there is “too much uncertainty about the future of American trading policy” to make trust predictions about GDP growth in the future.
“But I do expect that the rate increases like a small resistance to the American economy,” he added, “growth somewhat reduced compared to what else would have been achieved.”
Bill Adams, Chief Economist at Comerica Bank, said Newsweek: “The GDP report of the second quarter has a great headline, but details were weaker. The real final sale to private domestic buyers (Core GDP) grew at the weakest pace since the fourth quarter of 2022. Tarifs security, a wait-and-see attitude of companies and consumer-counting on company and consumer sentiment to be weighted on company and consumer sentiment.
“By combining the volatile first and second quarter, the real GDP grew a slow 1.2 percent on an annual basis in the first half of 2025,” he added. “This is a major delay in his increase of 2.8 percent in 2024 and 2.9 percent increase in 2023.”
What happens afterwards?
De Bea will release another series of estimates for the second quarterly growth later this month, followed by definitive estimates and data for the state in September.
Bacon announced in June that he would not look for re -election in 2026.
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