A new report found that the Trump administration’s 2025 tariffs raised costs as much as 55% higher for Midwest households than the national average.
This increase was an average of $2,000 per household.
The report notes that along with an increase in costs for households, the tariffs shrunk the region's GDP by an estimated $18 billion. They also disproportionately impacted low-income households. The report is by the nonpartisan Midwest Economic Policy Institute (MEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign.
Tariffs were raised to their highest levels since the 1930s in 2025 by the Trump administration.
In February 2026, the U.S. Supreme Court ruled the Trump administration’s sweeping tariffs were unconstitutional. They were replaced with a temporary 10% global tariff that expires July 24, 2026.
The Trump administration plans to impose new tariffs on goods from more than 80 countries, beginning Friday.
Data for the report came from the U.S. Department of Labor, the U.S. Department of Commerce, the U.S. Census Bureau, the U.S. Department of Agriculture, and Pew Charitable Trusts as well as tariff impact modeling from the Budget Lab at Yale University.
The researchers wanted to understand the effects on six Midwest states: Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin.
The report found that the tariffs impacted 18 million Midwest households to varying degrees.
Frank Manzo is an economist at the Illinois Economic Policy Institute (ILEPI).
Manzo and his team analyzed the six Midwest states to better understand why the region in particular experienced heightened impacts from the tariffs compared to the rest of the country.
“The Midwest is particularly exposed to tariffs because the region remains the epicenter of U.S. manufacturing and because consumer spending accounts for about two thirds of the economies of the six states we looked at, and even more in Michigan,” said Manzo.
In Michigan, these increased costs from tariffs were as much as $3,200.
The analysis found that the cost increases disproportionately burdened low-income households. The researchers estimated that these households spent three times more of their incomes on higher-priced goods subject to tariffs than wealthier households.
“Working families spend more of their budgets on the categories of goods that are most affected by import taxes. Things like groceries, things like clothing and automobiles. They spend more as a share of their income on those items, on the essentials, than do high income people. And so the net result is that low income households exhaust more of their earnings on tariff costs than anybody else,” said Manzo.
Manzo said the tariffs caused unbalanced economic harm to the Midwest due to the importance of manufacturing and agriculture in the economy.
“It varies because the Midwest as a whole accounts for one fifth of the nation's manufacturing and also one fifth of our agricultural output. But Midwest manufacturers reported that tariffs raised input costs by as much as 50% last year. And those reduce production by more than they protect American industries,” said Manzo.
“No region of the country is more exposed to these risks than the Midwest. And no state is more exposed to these risks than Michigan,” he said.
