US GDP growth slows in Q2 2026 amid tariffs and rising oil prices

Tariffs imposed on a range of imported goods and a sharp rise in crude‑oil prices have generated a supply‑side shock that slowed U.S. economic activity in the second quarter of 2026. Preliminary estimates from the Bureau of Economic Analysis show quarterly gross domestic product growth decelerating markedly compared with the first quarter, reflecting reduced manufacturing output and higher production costs across multiple sectors.

Analysts attribute the slowdown to the combined effect of higher import duties, which have raised input prices for manufacturers, and oil prices that climbed to levels near $100 per barrel, increasing transportation and energy expenses for businesses and consumers alike. The resulting squeeze on profit margins has dampened investment and hiring, while elevated consumer prices have curbed discretionary spending. Economists caution that unless tariff policies are adjusted or oil price pressures ease, the economy may face continued headwinds in the coming months, prompting close monitoring by the Federal Reserve and policymakers.