2. Trump’s Tariffs Mean Electric Grid Disruptions and Higher Power Bills

Electric grid reliability could be heavily impacted by a brewing trade war with our closest neighbor and ally. States like Michigan and Minnesota rely on imports of Canadian hydropower to keep the lights on. Ontario Premier Doug Ford just announced a retaliatory tariff of 25 percent on electricity exported to three states: Michigan, Minnesota, and New York. That is in addition to a 10 percent import tariff levied by President Trump. Tariffs on these imports would increase power bills for midwestern families significantly—and make it harder to hit clean energy and pollution targets.

Utilities also rely on imported materials to build power lines and transformers needed to keep the lights on. Wind and solar projects and other power plants also depend heavily on materials like steel and aluminum, which will face a new tariff levied by Trump on all countries beginning March 12. These tariffs make it harder to build the power infrastructure we need to address growing electricity demand. The grid operator in New York has already raised alarm about “serious adverse effects on reliability and wholesale electric markets” from these tariffs.

If this senseless trade war escalates further, Ontario has threatened to fully cut off power. Since Canadian provinces and U.S. states operate a shared, interconnected electric grid, that shutoff would threaten grid reliability even further. About 1.5 million households in Michigan, Minnesota, and New York rely on electricity from Ontario to keep the lights on. That’s 10 percent of all households in these three states.

3. Trump’s Tariffs Mean Higher Natural Gas Prices

Canada is also the largest source of imported methane gas to the U.S. A 10 percent tariff on imported gas would be passed on directly to customers in the form of higher heating bills each month. Currently 99 percent of U.S. methane gas imports come from Canada via pipeline. These imports make up about 10 percent of total U.S. consumption. That percentage is much higher in states near the Canadian border.

4. Trump’s Tariff's Auto Industry Job Losses

Tariffs on cars and automotive parts are set to begin in one month. These tariffs would hurt the auto industry and car buyers alike. In 2024, the U.S. imported $210 billion in automobiles and auto parts from Canada and Mexico. A 25 percent tariff would mean new car prices that are up to $12,000 higher. Higher prices and correspondingly lower sales would devastate the auto industry and kill automotive jobs.

Trade war chaos is incompatible with long-term investment certainty, especially when the Trump administration has also threatened to repeal key incentives for the electric vehicle transition.

How Three Midwestern States Will Be Affected

Overall, Trump’s tariffs on Canada will mean less money in the pockets of midwesterners, and for anyone who uses electricity or drives a car. States in the Midwest are particularly reliant on trade with Canada. Here’s how three midwestern states will be specifically harmed.

1. Michigan

Michigan is the second-largest importer of goods from both Canada and Mexico, out of all 50 states. Michigan is expected to see some of the largest price increases to electricity, natural gas, and gasoline in the country. 

Gasoline prices are expected to increase 25 to 50 cents per gallon in Michigan. Midwestern refineries rely heavily on Canadian crude oil imports. As more expensive crude oil works its way through these refineries, higher tariff costs will begin to be reflected when it hits gas pumps in mid-March.

Michigan also relies on hydropower and electricity imports from Ontario and other Canadian provinces, which will now face a combined 35 percent tariff from the U.S. and Ontario. If Ontario follows through on its threat to cut off electricity exports, that would cut off power that about 10 percent of Michigan households rely on, forcing grid operators to find much more expensive replacement sources and potentially affecting grid reliability. This means much higher electric bills when customers are already struggling to keep up.

Canada is also the leading source of imported natural gas, which will now face a 10 percent tariff. That will increase heating bills for many Michigan households.

Michigan’s auto industry, which heavily relies on imports from Mexico and Canada, will also be heavily impacted when tariffs on this sector begin in one month. Tariff uncertainty will freeze private investment and threaten jobs in the automotive and mobility industry, which employs 20 percent of workers in the state. 

2. Minnesota

Gasoline prices in Minnesota are expected to increase 20 to 50 cents per gallon, beginning in mid-March. Minnesota is also set to see a 35 percent combined tariff on electricity imported from Ontario. If Ontario shuts off power as threatened, about 10 percent of Minnesota households could be affected. The Minnesota Department of Commerce has stated that “we are confident that we will be able to keep the lights on for Minnesotans, but potentially at a much higher cost for energy bills.”

Minnesotans who use natural gas for heating will also see a 10 percent tariff on imported gas, which will be passed through directly to customers in the form of higher monthly gas bills.

3. Wisconsin

Gasoline prices in Wisconsin are predicted to increase 25 to 50 cents per gallon, beginning in mid-March. This is amongst the highest cost increases in the country.

Wisconsin does not directly import electricity from Ontario, but it participates in a shared electricity market with Michigan and Minnesota, so shortfalls in electricity in neighboring states could affect customers in Wisconsin as well.

Wisconsin customers that rely on natural gas for heating will face a 10 percent tariff on imported gas from Canada. This cost increase will be passed through to customers on their gas bills.

All Pain No Gain for Midwestern States

States in the Midwest will bear the brunt of Donald Trump’s tariffs on Canada. One of the first ways that families there will feel the pain is through soaring energy costs. These tariffs will have little benefit for consumers. Without a single concerted long-term strategy from the Trump administration to build domestic industries, the primary effect will be to increase costs and create inflation. Similarly, Trump’s war on low-cost clean energy places the actual solution to rising energy costs further out of reach. He’s making the problem worse on both fronts. 

Trump campaigned on a promise to cut energy costs in half within one year. Very soon, midwesterners will know firsthand whether that pledge is just one more empty promise.