WASHINGTON (Reuters) – The U.S. trade deficit in goods widened to a record high in March as businesses ramped up efforts to bring in merchandise ahead of President Donald Trump’s sweeping tariffs, suggesting trade was a large drag on economic growth in the first quarter.

While some of the imported goods ended up in warehouses at wholesalers, economists said this would not blunt the anticipated hit on gross domestic product from the deterioration in the trade deficit. The report from the Commerce Department on Tuesday showed wholesale inventories rising strongly last month.

The government is scheduled to publish its advance GDP estimate for the January-March quarter on Wednesday, which will coincide with Trump’s 100 days in office. Economists expect economic growth almost ground to a halt also as Trump’s ever-shifting tariffs position sowed confusion and uncertainty among businesses, making it harder to plan for the future.

Economists estimated trade could have sliced off as much as 1.9 percentage points from GDP last quarter.

“This report predicts that net exports will subtract powerfully from first-quarter GDP growth,” said Carl Weinberg, chief economist at High Frequency Economics. “The rise in inventories suggests some stockpiling of goods, but the amounts are very small and will not affect the GDP print very much.”The goods trade gap increased 9.6% to $162.0 billion, the highest on record, the Commerce Department’s Census Bureau said.

Goods imports soared $16.3 billion to an all-time high of $342.7 billion. They were driven by a 27.5% jump in imports of consumer goods. There were also solid increases in imports of automotive vehicles and capital goods. But imports of industrial supplies, which had been boosted by non-monetary gold, declined 13.5%. Food imports fell as did those of other goods.

Economists have cautioned that imports, which are a subtraction in the calculation of GDP, could greatly exaggerate an anticipated economic slowdown in gross domestic product growth in the January-March quarter.

The dollar was steady against a basket of currencies.

Exports Rise

Goods exports rose $2.2 billion to $180.8 billion in March. They were lifted by shipments of automotive vehicles, food and industrial supplies.

But exports of capital and consumer goods declined. While a weaker dollar is supportive of exports, gains could be limited by other nations imposing retaliatory duties on U.S.-made goods.

Some of the imports last month landed in warehouses as businesses sought to stock up. Wholesale goods inventories increased 0.5%, reflecting strong rises in stocks of both long-lasting manufactured and nondurable goods.

That followed a similar gain in February. But retail inventories fell 0.1%, matching February’s drop. They were weighed down by a 1.1% decline in stocks at motor vehicles and parts dealerships. Excluding motor vehicles and parts, retail inventories rose 0.4% after gaining 0.1% in February. This measure goes into the calculation of GDP.

A Reuters survey of economists forecast GDP increasing at a 0.3% annualized rate, which would be the slowest pace since the second quarter of 2022. The survey was concluded before the goods trade and inventory data.

Risks were already tilted to the downside. The Atlanta Federal Reserve is forecasting GDP declining at a 0.4% rate after adjusting for imports and exports of gold.

In addition to the imports hit, the uncertainty caused by the Trump administration’s often chaotic tariff policy, which has plunged the United States into a damaging trade war with China, also likely negatively impacted growth last quarter.

The economy grew at a 2.4% pace in the fourth quarter.

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(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)