By Lucia Mutikani

WASHINGTON (Reuters) -The U.S. economy likely stalled or even contracted in the first quarter, swamped by a deluge of imported goods by businesses eager to avoid higher costs, underscoring the disruptive nature of President Donald Trump’s often chaotic tariff policy.

The Commerce Department’s advance gross domestic product (GDP) report on Wednesday would, however, grossly exaggerate the economy’s dimming prospects. Coinciding with Trump’s 100 days in office, it will reinforce Americans’ growing disapproval of his handling of the economy thus far. Trump swept to victory last November on voter angst over the economy, especially inflation.

Consumer confidence is near five-year lows and business sentiment has tanked, while airlines have pulled their 2025 financial forecasts, citing uncertainty over spending on nonessential travel because of tariffs, which economists have warned will raise costs for companies and households.

“The trade shock now looms large, overshadowing everything else that the White House has attempted to accomplish,” said Joe Brusuelas, chief economist at RSM US. “The fact that we’ve gone from trade shock to financial shock to a possible recession in less than 100 days ought to give pause to those who want to continue down this road of tariffs.”

A Reuters survey of economists forecast GDP likely increased at a 0.3% annualized rate last quarter, which would be the slowest pace since the second quarter of 2022. But the survey was concluded before data on Tuesday showed the goods trade deficit surged to an all-time high in March amid record imports, which prompted economists to sharply downgrade their GDP estimates.

Economists estimated the trade deficit subtracted as much as 1.9 percentage points from GDP last quarter. Goldman Sachs forecast GDP contracted at a 0.8% rate. The economy grew at a 2.4% rate in the fourth quarter.

Some economists warned against placing too much weight on the GDP number, arguing that an unusually large amount of non-monetary gold had accounted for some of the jump in imports.

Adding to uncertainty over the forecast, the Atlanta Federal Reserve’s model forecast GDP plunging at a 1.5% pace after accounting for imports and exports of gold. But the New York Fed’s staff projected GDP increasing at a 2.6% rate.

Others argued that the data did not change the narrative of a struggling economy because of uncertainty due to tariffs.

“There isn’t any real positives to take from the report we expect,” said Matt Colyar, an economist at Moody’s Analytics. “The kind of capricious way that these policies have been announced, it reaches everybody, everybody knows about it right off the bat, and they’re rightly calculating that the stuff that they buy is going to go up more.”