The drop was caused by “frontloading” — businesses buying up imported goods before new tariffs kicked in — and a slowdown in consumer spending.

But the country is not in a recession. The economy has often bounced back after a bad quarter.

But forecasters put almost even odds on a recession — typically defined as two consecutive quarters of negative growth — in the next year. That’s up from a benign 20 percent when Trump took the oath of office in January.

While the news wasn’t unexpected, US stocks tumbled when regular trading opened an hour after the report was released.

Gross domestic product — the value of goods and services produced in the country — fell 0.3 percent in the first three months of the year.

For comparison, GDP rose 2.4 percent in the fourth quarter, and an average of about 3 percent over the past two years.

Tariffs.

The rush by businesses to stock up before the new duties took effect triggered a surge of imports. In GDP accounting, imports subtract from growth because the goods are produced outside of the United States.

The gap between imports and exports sliced 5 percentage points off GDP, the most on record.

Consumers — whose purchases power two-thirds of the economy — continued to open their wallets during the quarter. But spending wasn’t strong enough to offset the flood of imports.

A recession isn’t a foregone conclusion.

A separate measure of economic health — called real final sales to private domestic purchasers — rose a solid 3 percent in the quarter.

Trump trade adviser Peter Navarro told CNBC that the GDP report was “the best negative print I have ever seen in my life.”

But there’s good reason to be nervous.

The stocking up on imports ahead of tariffs sets the stage for a sharp falloff in purchases down the road, Gregory Daco, chief economist at the consulting firm EY-Parthenon, said in a note. That will be a “far more troubling phase of the ongoing economic slowdown,” he said.

But president’s decision to build a tariff wall around the United States has upended a global trading system that’s been in place since the end of World War II. The system has delivered cheap foreign goods to American consumers but also contributed to a sharp decline in domestic manufacturing.

Trump’s aggressive rollout has raised the specter of price increases so steep that exporting to the United States won’t make economic sense.

Torsten Slok, chief economist for Apollo Global Management, forecasts “COVID-like shortages” and significant layoffs in industries spanning trucking, logistics, and retail.

Moreover, Trump has created so much uncertainty among businesses that a growing number say they can’t forecast their earnings. Some companies have slowed hiring. Investors hate uncertainty. The Standard & Poor’s 500 index has lost 9 percent since Trump took the oath of office on Jan. 21

Correct.

Trump says his trade policy will revitalize US production, create good-paying factory jobs, and generate revenues that can be used to lower taxes. He’s warned of initial disruption but insists the country will be better off in the long run.

But most economists — and a growing number of business leaders — disagree. Consumer confidence has plunged.

A monthly jobs survey released Wednesday by ADP showed a downshift in private sector hiring in April. The Labor Department’s more comprehensive report is due out on Friday, and the consensus among forecasters is that employment growth will slow but remain positive.

But there’s no denying the outlook has darkened.

“The US administration’s on-off tariff policy has led to a confidence crisis with businesses favoring a wait-and-see approach in the face of historically elevated policy uncertainty,” Daco of EY-Parthenon ,said. “And while this malaise has yet to precipitate a retrenchment in consumer spending and business investment, massive disruptions to trade flows … persistent policy uncertainty, and heightened market volatility pose significant risks to the US economic outlook.”

In other words, buckle up.

Larry Edelman can be reached at [email protected].