U.S. manufacturing contracted in March after growing for two straight months, while a measure of inflation at the factory gate jumped to the highest level in nearly three years amid rising anxiety over tariffs on imported goods.

Data out Tuesday showed activity in the manufacturing sector slipped into contraction for the first time this year and costs continued to surge as suppliers weigh the impact of President Trump's tariff policy.

As Trump threatens to impose more tariffs on other nations, Chinese manufacturers are going to greater lengths to dodge them.