OTTAWA—Canada’s economy picked up the pace of growth in the first three months of the year as businesses braced for the disruption of a bruising trade war with the U.S., though domestic activity weakened and hints at what lies in store in the new tariff era.

Canada's economy grew by 2.2 per cent on an annualized basis in the first quarter, Statistics Canada said on Friday, expanding at a rate faster than expected.

A strong jump in tariff-driven exports fueled Canada’s growth at the start of this year, offsetting domestic weakness in other parts of the economy.