July 15, 2025
FOR IMMEDIATE RELEASE
July 15, 2025
Contact: Press@michigan.gov
Gov. Whitmer Highlights Impact of Federal Tariffs on Michigan Employers and Consumers, Causing Price Hikes and Layoffs Across Affected Industries
LANSING, Mich. – Today, Governor Gretchen Whitmer highlighted new data released by the Yale Budget Lab showing that the U.S. effective tariff rate is at its highest point in 115 years, reaching 20.6%. This historic rate will put a strain on Michigan businesses as they work against supply chain shortages and rising costs. Given that tariff policies are actively shifting, the current effective rate is seven times more than last year’s rate and could increase on August 1 if more tariffs are enacted as planned. The rising rate has continued to cause massive uncertainty for businesses, as they near the end of their pre-tariff inventories, foreshadowing higher costs for consumers. Certain American employers could face a direct cost of $82.3 billion as a result of the tariffs, hurting sales and payroll.
"I’m not against tariffs outright, but they are a blunt tool that must be used strategically and with a clear end goal,” said Governor Whitmer. “The new federal tariffs have already spiked the effective tariff rate to the highest it has been since 1910. This historic increase will put pressure on consumers and small businesses, spark uncertainty, and take thousands of dollars out of our pockets every single year. Michiganders can’t afford to bear the burden of these chaotic policies. I’ll continue to fight for smart fiscal management and common-sense trade policies that supports our businesses, grows our economy, and lowers costs for Michiganders.”
“The volatility we’ve seen in this year’s Retail Index scores is a clear indicator of the uncertainty business owners are facing with tariffs and the threat of tariffs,” said William J. Hallan, President & Chief Executive Officer of Michigan Retailers Association. “According to a member survey conducted in May 2025, 69% of Michigan retailers surveyed feel that tariffs and the threat of tariffs will negatively impact their business in the next 6-12 months. The long-term effects of tariffs remain a threat to the retail industry, with more than 75% of retailers stating that tariffs are impacting in their ability to plan for the next 3-5 years.”
Rising Tariff Rates Impact on U.S. Businesses
The current effective rate of 20.6% is the highest it has been since the 1910 and could increase as the administration considers changes to their policies. The rising rate will be disastrous for businesses across the country and especially in Michigan. Largely, companies have not yet had to react to tariffs as they have been working through inventory purchased before tariffs were enacted. However, as tariff rates continue to rise and stockrooms empty, companies will be forced to increase prices and review payrolls.
Specifically, certain U.S. employers could face a direct cost of $82.3 billion because of the federal tariff plans. While some businesses may bear the burden of tariffs in an effort to keep prices low for as long as possible, rising costs will likely force them to manage through price hikes, layoffs, hiring freezes, or lower profit margins. As a result, thousands of good-paying, local jobs could be laid off in the coming years, hurting Michiganders and our economy.
Rising Tariff Rates Impact on Consumers
While businesses will take a large hit as a result of the Trump administration’s tariff policy, consumers will largely bear the burden. In fact, companies are expected to pass 60% of their tariff costs onto consumers, meaning American consumers could lose out on anywhere between $2,100 and $4,900 each year. Major companies like Target, Walmart, and Costco have said in recent weeks that they will raise some prices because of tariff pressures. As a result, American consumers will see fewer dollars in their wallets as they head to the store to grab groceries or begin back-to-school shopping.
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