LANSING — President Trump’s back-and-forth tariff policy is worrying the stock market and causing concern for Michigan economists, who say consumers will likely end up paying higher prices.
As of Friday afternoon, most of the tariffs that would impact Michigan consumers had been delayed until April.
Trump announced exemptions this week for vehicles and car parts, which account for over $38 billion a year in trade between Michigan and Canada.
Economists say that if or when the tariffs do go into effect, consumers will quickly feel the impact with food prices.
“Agricultural products probably are the first thing that you will see price increases on,” said Jeff Rightmer, a global supply chain professor at the Wayne State University Ilitch School of Business.
In 2024, Michigan imported nearly $900 million in processed foods from Canada, along with $420 million in agricultural products and $144 million in livestock and livestock products.
“If some importer is importing tomatoes from Canada, and suddenly the price they have to pay for them goes up by 25% — well, then the price that that importer charges to Meijer to sell the tomatoes to Meijer is going to go up, and then Meijer is going to raise the price that they sell it to us,” said Ari Shwayder, a professor at the University of Michigan Ross School of Business. “And that’s all going to happen pretty quickly.”
Canadian officials have also raised the prospect of taxing some electricity entering the U.S., with Ontario Premier Doug Ford saying Michigan would be one of three states impacted. The 25% surcharge would go into effect Monday, and Ford has said he may consider stopping the flow of electricity entirely.
“The way the rhetoric has been going back and forth, it wouldn’t surprise me if they cut it, or they slowed it down, or they increased the price — they’re going to take some action,” Rightmer said.
Matt Helms, spokesperson for the Michigan Public Service Commission, said in a statement that Michigan is more of a pass-through state for Canadian power going to other states.
He says he’s not aware of any Michigan utilities purchasing electricity from Canada directly — but any impacts on the energy sector as a whole would likely also be felt in Michigan.
“It’s safe to assume that Michiganders will be paying more for electricity, paying more for propane and other heating fuels, and paying higher prices at the pump for gasoline,” Helms said.
Helms added that the state faces significant exposure to potential natural gas and crude oil price increases. More than 60% of Canadian oil flows into Midwest refineries, potentially spelling higher costs for consumers.
“We get a lot of oil from Canada into Michigan, and you will see that effect right at the pump,” Rightmer said. “And that could could happen within weeks.”