Study: Trump Tariffs Cost Iowa Families $2,000 in 2025, Hit Midwest Hardest
A new study finds that tariffs imposed by the Trump administration in 2025 raised costs for the average Midwest household by more than $2,000, shrank the region's economy by $18 billion, and cost the Midwest nearly 42,000 manufacturing jobs. Iowa families felt the pain especially hard due to the state's reliance on agricultural exports.
The report, released by the nonpartisan Midwest Economic Policy Institute (MEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois, analyzed data from the U.S. Department of Labor, Commerce, Census Bureau, Agriculture, and Pew Charitable Trusts. It focused on six states: Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin.
How much did tariffs cost Iowa families?
Researchers estimate the 2025 tariffs added more than $2,000 in costs to each of the Midwest's 18 million households. In Iowa, the impact was particularly severe because consumer spending accounts for over two-thirds of economic activity, and the state is a major player in manufacturing and agriculture.
Household cost increases in the Midwest were 55% higher than the national average of $1,320. Low-income families bore the brunt, paying three times more of their income on higher-priced goods than wealthier households.
“By raising the price of many consumer goods, tariffs impact low-income families who can least afford price hikes,” said University of Illinois Professor 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.”
What happened to Iowa manufacturing and agriculture?
After years of expansion, U.S. manufacturing employment and agricultural exports contracted in 2025. The study estimates the tariffs cost the Midwest nearly 42,000 manufacturing jobs and trimmed more than $18 billion from regional GDP. Iowa suffered the greatest vulnerability on agricultural exports, while Michigan and Indiana saw the biggest manufacturing job losses.
ILEPI Economist Frank Manzo IV noted: “While a targeted tariff policy has long been used as a tool for protecting U.S. producers from unfair competition, the blanket policy enacted by the Trump administration made no such distinctions. 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.”
What happens next with tariffs?
The Trump administration's 2025 tariffs were ruled unconstitutional by the U.S. Supreme Court in February 2026 and replaced with a temporary 10% global tariff that expired this week. The administration has already announced new rates, including a 50% levy on most Canadian goods.
Researchers urged policymakers to consider repealing blanket tariffs against nations with similar standards, issuing refund checks to taxpayers harmed by unconstitutional tariffs, and clawing back subsidies to businesses that offshore jobs.
“Consumers ultimately pay the cost of tariffs, with working families bearing a disproportionate burden,” Bruno concluded. “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 is a nonpartisan nonprofit research organization. The Project for Middle Class Renewal at the University of Illinois investigates working conditions to reduce poverty and promote middle-class jobs.
