In April, President Trump announced his long-promised reciprocal tariffs, which mainly consisted of a 10% baseline tax on imports from all countries, with some countries receiving higher taxes on imports if they previously held trade surpluses with the United States. Since April, President Trump has been ordering many additional tariffs, many of which have fallen under the radar as the impacts of tariffs have begun to settle in. Some of these additional tariffs include tariffs on Chinese made goods, tariffs on foreign made films, and tariffs on Apple products that are manufactured outside the United States. Most recently, President Trump promised a 25% tariff on trucks imported outside of the United States, which is set to be implemented on November 1st.
Current tariffs target China, Syria, Myanmar, Laos, and Brazil most heavily, with average weighted tariff rates exceeding 30% for these countries. Many of these tariffs were paused throughout the summer, but most resumed on August 1st. The industries most affected by current tariffs are toys and games, women’s and men’s clothing, ice cream, and beer. The average tariff rate currently exceeds 30% for all of these goods, meaning that consumers could face price hikes up to 30% across all of these goods.
By the end of September, President Trump’s tariffs resulted in a 1.7% increase in price levels, the equivalent of a $2,400 loss in average per household income. Depending on retaliatory tariffs from other countries, the average household income loss is likely to be even higher. If tariffs continue as promised, real GDP growth is estimated to decrease by 0.4% each year, which is about $125 billion in lost annual economic activity. By the end of 2025, current tariffs are expected to increase unemployment by 0.3 percentage points, reflecting 490,000 fewer employed workers.
At the state and local level, tariffs can interfere with budgeting and upend local economies. Tariffs have especially strong effects on states with intensive manufacturing and states with deep ties to global trade.
Intensive manufacturing states are especially reliant on global imports for various imports in the manufacturing process. Global imports account for 11.2% of the United States economy, but exceed 20% of state GDP in Indiana, Kentucky, Michigan, and Tennessee, four states whose economies rely heavily on manufacturing. In the local economies of these midwestern states, tariffs are likely to inflate manufacturing and production costs. In the long-run, this could reduce manufacturing wages, raise unemployment, or increase consumer prices in the region.
States with large coastal ports, such as New Jersey, South Carolina, Georgia, Texas, and California, have deep ties to global trade. Across these five states, imports as a proportion of GDP exceed the national average by 1 to 7 percentage points. For coastal communities in these states, tariffs reduce shipping volumes and create operational disruptions. In the long-run, local prices are likely to be inflated, and truck drivers, port workers, and warehouse workers are all likely to see fewer hours and layoffs.
Because tariffs reduce consumer spending and dampen business investment, state tax revenues suffer as a result. Tax revenues in most states have already fallen below original projected levels due to federal uncertainties. Lingering tariffs are likely to reduce tax revenues even more drastically. Many states have begun factoring tariffs into their future revenue projections. For example, Michigan officials lowered revenue projections by $320 million after forecasting weaker economic conditions, including the projected loss of auto sector jobs due to tariff cost pressures. As uncertainties around the impacts of tariffs to local industries continue, state governments are likely to delay, redesign, or cancel key infrastructure projects, both due to higher prices and uncertain future prices of construction materials.
In addition to manufacturing and port cities experiencing economic losses from tariffs, some more unique local economies have already begun to endure worsened economic conditions.
In Las Vegas, the local economy is highly dependent on tourism due to the high number of hotels, resorts, and convention centers. In June 2025, Las Vegas saw a 11% reduction in tourism, 13% fewer international travelers, and 15% lower hotel occupancy. Many officials are blaming President Trump’s tariffs for the impacts to the local economy, with anti-American sentiment growing in nearby countries like Canada and Mexico.
In California, the local wine industry is facing heightened economic pressures for exporters of wine, importers of wine, and domestic wine sellers alike. Wine is one of the highest taxed goods among new tariffs implemented by the Trump administration. In California, hundreds of thousands of dollars of wine orders have already been canceled by Canadian partners due to trade war pressures. Some local wine producers have already considered closing their businesses if they aren’t able to sell imported European wine at a profit. If less wine is imported from Europe, consumers could buy more locally fermented wine, which would benefit domestic producers. However, increased prices of glass imports and other materials involved in the wine production and bottling process from countries like China are likely to offset any potential benefit to local wine sellers.
In Ohio, soybean farmers are feeling the impacts of President Trump’s imposed tariffs as well. Soybeans are the highest produced crop in Ohio, and the total economic contribution of the soybean industry in Ohio is about $7.5 billion. Local Ohio soybean farmers are facing higher prices for agriculture equipment, fertilizer, and crop insurance while per bushel prices for soybeans are falling. Between 2024 to 2025, per bushel soybean prices are expected to fall by 8.8%. In addition to input and output prices, China, who is typically responsible for more than half of all US soybean exports, stopped purchasing soybeans from the United States entirely due to trade war concerns. Higher input prices, lower output prices, and fewer export opportunities place economic pressure on local soybean farmers. In Illinois, Governor Pritzker declared an agricultural export crisis: soybean farmers have seen prices fall below breakeven levels, resulting in some Illinois farms selling land or declaring bankruptcy.
In April 2025, a group of small businesses collaborated to sue President Trump over the tariffs enacted in the International Emergency Economic Powers Act under Learning Resources, Inc v. Trump. The educational toy company, along with a few other small businesses, claim that President Trump’s tariffs under the International Emergency Economic Powers Act are illegal, and the implementation of these tariffs significantly harmed the companies’ businesses.
The case is currently set for argument in front of the Supreme Court on November 5th, 2025. If the International Emergency Economic Powers Act tariffs were to be repealed, the average effective tariff rate on all imports would be reduced from 11.4% to 4.0%. For context, the average effective tariff rate on all imports in 2024 was 2.5%. The most costly tariffs are those passed under the Emergency Economic Powers Act, meaning that if these tariffs were repealed by the Supreme Court, the social costs of President Trump’s tariffs as a whole would be significantly reduced.
Tariffs are already having a significant impact on state economies. Future decisions on tariffs could be the difference between a healthy economy and recession in U.S. states over the next couple years.