La Grange, Ill. — A new study by the nonpartisan Midwest Economic Policy Institute (MEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign shows that Trump administration tariffs raised costs on Midwest households in Illinois, Indiana, Iowa, Michigan, Minnesota and Wisconsin, by an average of $2,000 in 2025.
In a MEPI press release, officials state that data in the Tariffs and the Midwest: Impacts on Households, Manufacturing and Economies in Six States report shows that the tariffs shrunk the Midwest economy by $18 billion, reduced the region’s manufacturing employment by more than 41,000 and disproportionately impacted low-income households.
The report states that the Trump administration’s increased tariffs on imported goods and supply chains were at their highest levels since the 1930s in 2025. Although the U.S. Supreme Court ruled many of the administration’s 2025 tariffs as unconstitutional in February of this year, they were replaced with a temporary 10% global tariff that will soon expire.
“Research consistently shows the costs of tariffs are passed along to consumers, and the Midwest has faced outsized exposure because consumer spending accounts for more than two-thirds of all economic activity and the region is responsible for about one-fifth of the nation’s manufacturing and agricultural output,” said ILEPI Economist and study coauthor Frank Manzo IV. “The data confirms that the trade war launched in 2025 has been a substantial headwind for the economy, with Midwest households faring far worse than the nation as a whole.”
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Data for the report was obtained 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 alongside tariff impact modeling from the Budget Lab at Yale University to quantify the effects on six Midwest States: Illinois, Indiana, Iowa, Michigan, Minnesota and Wisconsin. Household costs are based on each state’s consumer spending, market for imports and manufacturing industry composition, while economic impacts are scaled by each state’s trade exposure and trend-adjusted manufacturing job losses capture both direct layoffs and jobs that would have existed without the tariffs.
Additionally, officials noted that the data reveals that both U.S. manufacturing employment and agricultural exports contracted in 2025. Researchers estimate that the tariffs cost the Midwest nearly 42,000 manufacturing jobs and trimmed more than $18 billion from the region’s GDP.
“Consumers ultimately pay the cost of tariffs, with working families bearing a disproportionate burden,” said 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.”
