LANSING, Mich. (June 20, 2025) — Earlier this week, on Wednesday, June 18, the Senate Oversight Committee, chaired by Sen. Sam Singh (D-East Lansing), heard from economic experts and local businesses on how plummeting consumer confidence fueled by sweeping tariffs has impacted Michiganders’ spending behavior in recent months. As the Trump administration continues to threaten additional tariffs on specific industries, from pharmaceuticals to lumber and copper, testifiers shared how Trump’s trade war has affected and continues to threaten Michigan businesses, consumers, and local economies.
“The impacts of Trump’s reckless and blanket tariffs are sparking fear and uncertainty for Michigan consumers, harming local businesses, and posing a real and significant threat to the health of our state’s economy and future,” said Sen. Singh. “The recent shifts in consumer sentiment and spending behavior, as highlighted by our testifiers, are particularly alarming for our small mom and pop shops who don’t always have access to the safety net that other larger companies do. My Senate colleagues and I remain committed to doing all that we can to mitigate the negative effects of these short-sighted trade policies on Michiganders — consumers, workers, and business owners alike.”
Since taking office for his second term, Trump has implemented numerous tariffs on specific countries, industries, and products, including raising prices on Michigan’s auto allies in Canada, and at one point, increasing tariffs on Chinese imports to a skyrocketing total of 145%. Many of these tariffs have been paused, reduced, or legally challenged by several states and other entities, causing a widespread tariff whiplash that has sparked concern and uncertainty among consumers and businesses here in Michigan and across the country.
Dr. Joanne Hsu, Research Associate Professor and Director of the Surveys of Consumers with the Institute for Social Research at the University of Michigan, testified how these new trade policies are impacting consumers nationwide. She shared the latest insights from their Survey of Consumers, which has been measuring consumer attitudes towards the economy for over 80 years.
As Hsu explained, their research shows how consumer sentiment had been on a general upward trend from June 2022 to December 2024 before plunging over the next four months in 2025 from uncertainty over the new tariffs — declining to the second-lowest level since the early 1950s. And the concerns are shared across the political spectrum, as the data demonstrates, with even Republicans who broadly support Trump’s agenda agreeing that the economic outlook has deteriorated over the course of the year. Hsu noted that while the latest findings show that concerns have softened slightly this month, widespread worry about the economy remains, with nearly two-thirds of consumers expecting unemployment to worsen soon and a weakening sentiment even among higher income groups, who generate the majority of consumer spending.
Karen Roofe, a Traverse City-based gift shop owner and board member of the Downtown Traverse City Association, provided firsthand insight into how these shifts in buying behavior have impacted her business, neighboring storefronts, and the local tourism economy. Over the course of this year, her business has witnessed a decline in customer traffic along with smaller transactions and lower sales. The economic uncertainty and slowdown have limited her ability to hire new staff, placing increased financial pressure on shop owners who are having to work around the clock to keep the doors open.
Roofe explained how the recent changes in tourist behavior inextricably affect the local community as well, saying, “In a tourist town like Traverse City, even a small dip in consumer confidence has an outsized impact. Visitors are still coming, but they’re spending more cautiously; they’re booking shorter stays; they’re dining out less and being more selective with their purchases. That slowdown affects our locals also. Our economy is deeply interconnected, so when our visitors spend less, the ripple effect hits our community members, who rely on tourism and the driven income from that. Everyone feels the squeeze.”
A recent study from the Michigan State University Center for Canadian Studies showcases the impact of the Trump administration’s new tariffs on the state’s manufacturing sector, which caused a 19-fold increase in import duties from Canada between January and April of 2025. As the research explains, this number is expected to rise with the 50% steel and aluminum tariffs that went into effect earlier this month, threatening tens of thousands of jobs in Michigan’s manufacturing plants.
Speaking on Michigan’s robust clean energy manufacturing sector and electric vehicle production, Nick Nigro, founder of Atlas Public Policy, also cautioned a potential threat to tens of thousands of jobs and the future of the auto industry here in the state.
This hearing is one of several that Michigan Senate Democrats are holding to investigate the ramifications of recent decisions by the Trump administration on people and communities across Michigan. A recording of the hearing can be found here.