US economy shrank 0.5% in Q1 on import surge ahead of tariffs

Imports are a subtraction in the calculation of GDP, and the overall decrease in the first three months this year reflected this uptick, alongside a drop in government spending.

The movements were partially offset by advances in consumption and investment.

But the change in estimates on Thursday mainly reflected "downward revisions to consumer spending and exports," said the Commerce Department.

This was partly offset by a downward revision to imports, the department added.

In April, Trump imposed a 10 percent tariff on imports from almost all US trading partners and unveiled higher duties on dozens of economies before pausing their implementation while trade negotiations are ongoing.

But a July deadline for their implementation is approaching, adding to uncertainty in the world's biggest economy.

Trump has also slapped steep levies on imports of steel, aluminum and autos.

The president's changes in tariff policy have roiled financial markets, snarled supply chains and dragged on consumer sentiment.

Economists warn the duties could fuel inflation and weigh on economic growth, although they have so far not caused widespread price increases in the country.

For now, policymakers are closely monitoring economic data over the summer for the broader effects of trade policies.

*With Agency Inputs