LANSING — Michigan businesses and consumers are continuing to see the impacts of President Trump’s tariff policy as the administration says it’s walking back some charges on everyday items.
A recent report from the state says that grocery prices are expected to rise about 3.5% by the end of 2025, with harsher impacts expected for low-income consumers.
Last week, the Trump administration said it would lift tariffs on everyday products that have seen price increases in recent months — coffee, orange juice, beef, bananas and other fruits.
“For lower income households, a huge portion of their budget is made up of those necessity items,” said Ari Shwayder, an economics professor at the University of Michigan Ross School of Business.
Economists say that the price increases and consumer impacts are largely unsurprising.
“When we tax imported goods, like any tax, that cost is often going to get passed down,” Shwayder said. “And so if a tax gets put on coffee or beef or pasta or anything like that, then it’s likely that families in Michigan and elsewhere are going to end up paying more for that at the grocery store.”
Experts say that some of the tariff exemptions could go toward reducing prices for consumers — but some broader market trends may prove too difficult to influence with the rollbacks.
Coffee and beef — really, the only thing you do by taking away the tariffs is you likely lower the pace that price increases,” said Jason Miller, a supply chain management professor with MSU’s Broad College of Business.
According to the Consumer Price Index, beef products have seen prices increases in the double digits, largely resulting from a shortage of product from American producers.
“The U.S. consumers should not expect the price of beef to come down anytime over the next couple months,”
Tariffs are also impacting Michigan businesses, largely in the agriculture and automotive fields.
The states tariff report found significant drops in exports over several farm products — an 89% drop in wheat, a 62% drop in cherries and a 46% drop in soybeans.
“China, which has historically been one of our largest buyers of soybeans from the U.S., just stopped,” Shwayder said. “And so there’s been a huge glut of soybeans on the market. Prices have dropped, and the farmers are really struggling.”