Midwestern Households Hardest Hit by Tariff Price Increases

La Grange, IL, August 13, 2026—”In 2025, the federal government increased tariffs—or taxes on items imported from other countries—to their highest level since the 1930s,” reports the Midwest Economic Policy Institute. “The ‘effective tariff rate,’ or revenue divided by imports, jumped from 3% to about 10%. After the U.S. Supreme Court struck down most of the hikes in February 2026, the Trump administration responded with a new 10% global tariff. While tariffs in some cases can protect American workers, research shows that at least 90% of their cost is passed onto U.S. consumers through higher prices.”

Midwest states are particularly exposed to tariffs and retaliatory actions from foreign countries.

• Consumer spending accounts for between 60% and 78% of the economies of Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin.

• These six Midwest states represent 19% of U.S. manufacturing output and 20% of

U.S. agricultural output, making them vulnerable to tariffs on overseas supply chains and foreign

retaliation which contributed to a 4% drop in agricultural exports over the year.

• Midwest manufacturers reported that tariffs added 10% to 48% in costs in 2025.

The full report is available here: https://www.illinoisepi.org/wp-content/uploads/2026/07/MEPI-PMCR-Tariffs-and-the-Midwest-Report-FINAL.pdf