The analysis found the 2025 tariffs added more than $2,000 in costs on average to each of the Midwest’s 18 million households. They cost as much as $3,200 in Michigan, which boasts the region’s highest share of consumer spending as a percentage of GDP. Overall, tariff-linked household cost increases in the Midwest were 55% higher than the national average ($1,320).

ILEPI and PMCR researchers noted that these cost increases disproportionately burdened low-income families, estimating they paid 3 times more of their incomes on higher-priced goods subject to tariffs than wealthier households.

“By raising the price of many consumer goods, tariffs impact low-income families who can least afford price hikes,” added University of Illinois Professor and PMCR Director Dr. Robert Bruno. “In 2025, the people most impacted by higher costs were still reeling from pandemic era supply-chain disruptions and inflationary spikes that surpassed their wage growth.”

In addition to higher consumer prices, the data reveals that after years of expansion, both U.S. manufacturing employment and agricultural exports contracted in 2025. Driven by tariff-induced increases to production costs and foreign retaliation against U.S. exports, researchers estimate that this cost the Midwest nearly 42,000 manufacturing jobs and trimmed more than $18 billion from the region’s GDP. While all states suffered losses, Michigan and Indiana suffered the biggest hit to manufacturing employment, Iowa suffered the greatest vulnerability on agricultural exports, and the diversified Illinois economy saw the largest decline in GDP.

“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,” Manzo added. “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.” 

Looking ahead, researchers cautioned that any blanket tariff regime would increase household costs, reduce factory jobs, and produce weaker GDP growth than the alternative with no such levies in place.

In light of the Supreme Court’s action to invalidate most of the 2025 tariffs, researchers urged policymakers to consider a range of actions to mitigate their impacts—including repealing blanket tariffs against nations with similar standards as the United States, issuing refund checks directly to taxpayers adversely affected by unconstitutional tariffs, and clawing back taxpayer subsidies to businesses that offshore jobs.

“Consumers ultimately pay the cost of tariffs, with working families bearing a disproportionate burden,” concluded Bruno. “Targeted tariffs can be effective at prioritizing American workers and industries, but one-size-fits-all ‘blanket’ policies can disrupt supply chains, increase production costs, and invite retaliation that results in higher prices, fewer jobs, and less access to global markets. No region of the country is more exposed to these risks than the Midwest.”  

The Midwest Economic Policy Institute (MEPI) is a nonprofit, nonpartisan research organization founded in 2013 to deliver actionable research and expert analysis on public policy issues impacting businesses, working families, and taxpayers. 

The Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign investigates working conditions in today's economy to elevate public discourse aimed at reducing poverty, creating more stable forms of employment, and promoting middle-class jobs.