WASHINGTON (Reuters) -The U.S. trade deficit in goods widened sharply in March as imports surged, suggesting that trade exerted a large drag on economic growth in the first quarter.
The goods trade gap increased 9.6% to $162.0 billion, the Commerce Department’s Census Bureau said on Tuesday.
Goods imports soared $16.3 billion to $342.7 billion, likely as businesses rushed to bring in goods to avoid President Donald Trump’s sweeping tariffs.
Economists have cautioned that imports, which were also boosted by nonmonetary gold imports, could greatly exaggerate an anticipated economic slowdown in gross domestic product growth in the January-March quarter. Imports are a subtraction in the calculation of GDP.
Goods exports rose $2.2 billion to $180.8 billion in March.
The government is scheduled to publish its advance GDP estimate for the first quarter on Wednesday, which will coincide with Trump’s 100 days in office. 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.
Risks are 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, uncertainty caused by the Trump administration’s often chaotic tariffs 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.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
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