Wholesalers, distributors and their customers stocked up on merchandise early in 2025 to get ahead of anticipated higher prices as tariffs kick in. While growth in wholesale sales and inventories slowed in April, according to the April wholesale trade report released Monday by the U.S. Department of Commerce, performance varied widely by category in ways closely related to Trump administration trade and spending policies and AI-related data center construction.
The data center buildout, tied to the data-processing demands of AI, drove strong growth in several wholesale sectors, says Alex Chausovsky, director of analytics and consulting for Bundy Group, an investment bank. That includes 19.4% growth in electrical equipment compared to April 2024, 17.5% in computer equipment and 9.5% in professional equipment, which includes some sales of computer peripherals and software.
On the other hand, Chausovsky notes slower growth in sectors related to the construction of semiconductor fabrication plants as the Trump renegotiates subsidies for construction of semiconductor fabrication plants in the U.S. authorized by the 2022 CHIPS Act. The $52.7 billion CHIPS Act initially gave a big boost to manufacturing construction, but that peaked in May 2024, Chausovsky says. “It’s still quite elevated relative to historic norms,” he says, “but it’s no longer accelerating.”
Total wholesale sales ticked up just 0.1% in April compared to March, after growing by 0.8% in March and 2.0% in February compared to the prior month. Sales were up 6.0% in April compared to April 2024.
Durable goods sales continued to grow faster than non-durables, increasing by 0.2% compared to March 2025 and 8.4% versus April 2024. Non-durable sales grew 0.1% month-over-month and 3.8% year-over-year.
Chausovsky says President Donald Trump’s April 2 announcements of higher tariffs on goods from many countries drove companies to stock up on merchandise before the new levies raise prices, particularly of durable goods that can sit on warehouse shelves for an extended period. “The early April tariff announcements put a little urgency to buy ahead of the increasing prices that are surely coming down the pipeline and to build inventory,” he says.
Inventory growth also slowed to 0.2% in April compared to March, after averaging better than 0.5% growth in the first three months of the year. The inventory/sales ratio remained at 1.30 in April, unchanged from March, and down from 1.34 in April 2024.
For durable goods the ratio also remained unchanged at 1.69 versus March and down from 1.80 in April 2024.
While inventory changes mostly stemmed from seasonal demand, Chausovsky says, the 13.0% year-over-year increase in pharmaceutical inventories in April likely represents a reaction to Trump’s April announcement of stiff tariffs. China and India, which together account for more than half of U.S. drug imports.
With Trump’s pause on many threatened tariffs due to expire in July, the outcome of current U.S. tariff negotiations with China, India, the European Union and other countries will no doubt impact the wholesale and distribution sector over the coming months, Chausovsky says.
“Everybody is in that hold-your-breath mode to see what the negotiations yield,” he says. “We should see substantial movement on the trade front in the next four weeks, which will be very telling for what the second half of the year holds.”
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Don Davis, former editor-in-chief of Internet Retailer magazine and Vertical Web Media, is a freelance writer based in Chicago. His experience in retail and distribution goes back to his childhood when he worked in the toy wholesale business founded by his father and two uncles and in their discount department stores located throughout the New York metropolitan area.