Study: Trump Tariffs Added $2,000 to Midwest Household Costs, Cut 41,000 Jobs
Tariffs implemented under the Trump administration in 2025 significantly increased consumer costs, reduced manufacturing employment, and slowed economic growth across the Midwest, according to a study released July 22 by the Midwest Economic Policy Institute and the University of Illinois.
The report, titled “Tariffs and the Midwest: Impacts on Households, Manufacturing, and Economies in Six States,” estimates that the average household in the region paid more than $2,000 in additional costs last year due to import taxes. That figure exceeds the national average of $1,320 by roughly 55 percent.
Researchers analyzed economic data across six states: Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin, using federal datasets and modeling from Yale University’s Budget Lab. They found that tariff-related costs were highest in Michigan, where households paid up to $3,200 on average.
“While a targeted tariff policy has long been used as a tool for protecting U.S. producers from unfair competition and strengthening domestic supply chains, the blanket policy enacted by the Trump administration made no such distinctions,” said Frank Manzo IV, economist at MEPI and coauthor of the report. “The data shows that this caused disproportionate economic harm in the Midwest due to the importance of manufacturing and agriculture to the region’s economy.”
In addition to rising household costs, the study estimates the tariffs reduced Midwest manufacturing employment by more than 41,000 jobs and cut approximately $18 billion from regional gross domestic product. Michigan and Indiana experienced the largest manufacturing job losses, while Iowa’s agricultural sector proved especially vulnerable to export declines. Illinois, with its diversified economy, saw the largest overall GDP reduction.
The tariffs, which reached their highest levels since the 1930s, also triggered retaliatory actions from U.S. trading partners, further suppressing exports. Although the U.S. Supreme Court invalidated many of the 2025 tariffs in early 2026, they were temporarily replaced with a 10 percent global tariff set to expire this week. New tariff measures have already been proposed, including a 50 percent levy on many Canadian imports.
$166 billion in tariff refunds have gone to importers and businesses that were directly assessed the now-invalidated 2025 tariffs, not consumers who absorbed the price increases in the stores.
