The U.S. economy expanded more than expected as President Donald Trump’s tariffs took hold over recent months, federal government data on Wednesday showed.

A new analysis suggess U.S. factory costs could increase by roughly two per cent to 4.5 per cent as the tariff policies of President Donald Trump continue to impact supply chains.

The Trump administration touts tariffs as part of a wider set of "America First economic policies," which have "sparked trillions of dollars in new investment in U.S. manufacturing, technology, and infrastructure," according to the White House's website.

The president’s vision for reshaping global trade is falling into place, but he is embarking on an experiment that economists say could still produce damaging results.