Trump tariffs added more than $2,000 to Midwest households, study finds

New research from the Midwest Economic Policy Institute and the University of Illinois says 2025 Trump tariffs hit Midwest families, factories and farm exports harder than the nation, lifting household costs, cutting jobs and shaving billions from regional GDP. The findings arrive as the administration moves to replace invalidated tariffs with new levies, including a 50% duty on most Canadian goods.

Why it matters: - The study says blanket tariffs can raise consumer prices, weaken factory employment and slow regional growth. - The Midwest is especially exposed because manufacturing and agriculture make up a large share of the region’s economy. - Low-income households bore a bigger burden because higher prices took a larger share of their income.

What happened: - The Midwest Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign released a study on tariffs and six Midwest states: Illinois, Indiana, Iowa, Michigan, Minnesota and Wisconsin. - The report estimates that tariffs imposed by the Trump administration in 2025 raised costs for the average Midwest household by more than $2,000. - The same tariffs trimmed more than $18 billion from the Midwest economy and reduced manufacturing employment by more than 41,000 jobs. - Michigan saw household cost increases as high as $3,200, according to the analysis. - Tariff-linked household cost increases in the Midwest were 55% higher than the national average of $1,320. - The Trump administration’s 2025 tariff increases pushed import taxes and supply-chain levies to their highest levels since the 1930s. - Some countries responded with retaliatory measures against U.S. exports. - The U.S. Supreme Court ruled many of the 2025 tariffs unconstitutional in February 2026. - Those tariffs were replaced with a temporary 10% global tariff that expires this week. - The administration has already announced new tariff rates, including a 50% levy on most Canadian goods.

The details: - The report uses data from the U.S. Department of Labor, U.S. Department of Commerce, U.S. Census Bureau, U.S. Department of Agriculture and Pew Charitable Trusts. - The analysis also uses tariff impact modeling from the Budget Lab at Yale University. - Household cost estimates are based on each state’s consumer spending, import exposure and manufacturing mix. - Economic impacts are scaled by each state’s trade exposure. - Trend-adjusted manufacturing job losses capture both direct layoffs and jobs that would have existed without tariffs. - Researchers estimate that low-income families paid about three times more of their incomes on higher-priced tariffed goods than wealthier households. - The study says U.S. manufacturing employment and agricultural exports both contracted in 2025 after years of expansion. - Tariff-driven production costs and foreign retaliation against U.S. exports helped drive the losses. - Michigan and Indiana saw the biggest manufacturing employment hits among the six states. - Iowa faced the greatest vulnerability on agricultural exports. - Illinois had the largest decline in GDP because of its diversified economy. - Researchers say all six states suffered losses. - Frank Manzo IV, an economist with ILEPI and a study coauthor, said tariff costs are passed along to consumers and that the Midwest faced outsized exposure because consumer spending drives more than two-thirds of economic activity and the region produces about one-fifth of U.S. manufacturing and agricultural output. - Manzo also said the 2025 trade war was a substantial headwind for the economy and left Midwest households worse off than the nation overall. - Dr. Robert Bruno, director of PMCR at the University of Illinois, said low-income families were hit hardest because they were still recovering from pandemic-era supply-chain disruptions and inflation that outpaced wage growth.

Between the lines: - The report draws a sharp distinction between targeted tariffs and broad-based tariff policy. - The authors argue blanket tariffs are more likely to hit regions with heavy manufacturing and farm activity, such as the Midwest. - The analysis suggests the costs of tariffs can cascade from import prices to production expenses, exports and employment. - The findings also frame tariff policy as a political tradeoff between protecting some domestic industries and raising costs for consumers and employers.

What’s next: - Researchers warned that any blanket tariff regime would likely raise household costs, cut factory jobs and produce weaker GDP growth than no new levies. - The study urges policymakers to consider repealing blanket tariffs on nations with standards similar to the United States. - The authors also call for refund checks to taxpayers harmed by unconstitutional tariffs. - The report recommends clawing back taxpayer subsidies to businesses that offshore jobs. - The administration is moving ahead with new tariff rates even as the temporary global tariff is set to expire this week.

The bottom line: - The Midwest study says 2025 tariffs functioned as a broad tax on households and businesses, with the heaviest pain landing on lower-income families and manufacturing states.