Governor Whitmer Orders Study of Tariff Impact on Michigan Economy as Federal Refund Process Unclear

Michigan State Agencies to Report on Economic Toll of Federal Tariffs

LANSING — Governor Gretchen Whitmer signed an executive directive Thursday, marking the one-year anniversary of the controversial "Liberation Day" tariffs that were ultimately struck down by the U.S. Supreme Court in February 2026. The directive instructs state departments to submit comprehensive reports on how tariffs have impacted Michigan industries and consumers, while also ensuring businesses understand how to seek refunds from the federal government.

"The president's tariffs have jacked up costs, and Michiganders have been paying the price," Whitmer said in a statement. "Now that the Supreme Court has ruled that these tariffs are illegal, it's time for Michiganders to get their money back."

The Scope of the Problem

According to the Michigan Retailers Association (MRA), a recent survey found that nearly 75% of Michigan retailers reported a negative or strongly negative impact from tariffs since April 2025. More than half of Michigan retailers, 56.1%, also said uncertainty surrounding tariffs has affected their businesses, in addition to the tariffs themselves.

"The impacts really are across the board," said Vic Vega, MRA Vice President of Communications. "Changing item pricing, changing inventory or changes to their suppliers. Other members have also shared making changes to the business processes or delaying pre-planned projects, things like maintenance or upgrades to their business, technology advancements."

A recent survey from the MRA found nearly 75% of Michigan retailers reported a negative or strongly negative impact from tariffs since April 2025. More than half of Michigan retailers, 56.1%, also said uncertainty surrounding tariffs has affected their businesses, in addition to the tariffs themselves.

Economic Costs to Families

The directive highlights the broad economic impact of the tariffs. A recent analysis found that the tariffs cost U.S. automakers an estimated $35 billion last year alone. For working families, the costs have been significant.

For working families, tariffs have cost each family on average $1,000 per year. They have led to higher prices for cars, appliances, construction materials, and consumer products. U.S. consumers and businesses have borne most of the cost of these tariffs rather than foreign producers.

According to the nonpartisan Yale University Budget Lab, the tariffs brought about a loss of between $450 and $570 for the average U.S. household.

The Federal Refund Process Remains Unclear

Despite the Supreme Court ruling that struck down the tariffs, the process for returning those funds remains uncertain. The U.S. Supreme Court ruled unconstitutional the tariffs imposed solely by the executive under the International Emergency Economic Powers Act (IEEPA) without Congressional action.

While the administration has assured the federal courts that they have set aside the $166 billion in unconstitutional tariffs, they have yet to establish a process for returning those funds.

"Any process must be accessible to all importers who have paid tariffs, including small businesses and individuals who may not have access to expensive counsel to access refunds they are owed," Whitmer's directive states.

Federal System Still in Development

U.S. Customs and Border Protection is still developing the system to process refund claims. In a recent filing with the U.S. Court of International Trade, a CBP official detailed that the processing system is still in development with a goal of taking up to 45 days to review and process refund claims once it is operational.

Dr. Jeff Rightmer, an associate professor of teaching at Wayne State University's Mike Ilitch School of Business, believes the process will be long and complex. He noted that while companies are expected to pay tariffs within 10 business days of goods crossing the border, getting money back is a different story.

"The government's great at taking in money. It's a lot harder to give back money," Rightmer said.

Who Qualifies for Refunds

The refund process has specific eligibility requirements. Only entities that are listed as importer of record like big-box stores or small businesses are eligible, not customers who may have absorbed the costs.

Dr. Rightmer explained that the Supreme Court addressed the legality of the tariffs but stopped short of spelling out what happens to the money already collected.

"They ruled on the legality of the tariffs under the War Act and ruled that we're not at war with these countries, so you can't use this. So, they struck that down. But they didn't say anything about, 'OK, you've collected all of these. What are you going to do with them? Do you have to give it back or anything?'" he said.

Small Business Impact

For Detroit-area small business owners, the tariff fight is deeply personal. Sherrie Savage is the founder of The Coloring Museum, an interactive art space that uses the power of coloring to promote mental wellness. She launched the concept from her self-published coloring book, "Naturally Illustrated," and grew it into a business after a series of pop-up coloring events showed real community demand.

In 2025, Savage says she spent well over $10,000 in tariff costs. While Savage has worked to keep prices reasonable, she acknowledges some of those costs have been passed on to customers. For Savage, a refund would mean more than padding her bottom line.

"Everything. So, as I mentioned to you before, one of the things that I really would have liked to happen during the holiday season was to give back to my employees some bonuses. The Coloring Museum is all about social impact, it's about community, and then also about my staff and making sure that they're taken care of along with their families," Savage said.

Businesses That Absorbed the Costs

Some small business owners took a different approach. Jennifer Harmon, owner of Jen's Finest Things, took a different approach. Rather than pass tariff costs on to her customers, she absorbed them — eating roughly 20 percent of her supply costs last year. Jen's Finest Things sells handmade beaded jewelry, custom earrings, patches, sunglasses and accessories — with a pricing range designed to stay accessible to everyone.

A refund, Harmon said, would go straight back into the business.

"A refund on these tariffs would mean a lot because it would give me back some of the profit that I would have made. It will allow me to have a profit versus just a small amount, because again, I didn't apply it to the customer," Harmon said.

Despite the financial pressure, her customers never stopped showing up.

Even though the tariffs were there, my customers still were supporting me. So that was the blessing on the one hand," Harmon said.

She closed with a direct message to the public.

The climate for small business owners right now is that we need your support. Regardless if it's sharing our information, referring somebody to us, or even making a purchase — being it a small purchase or a big purchase — it will help us all," Harmon said.

Guidance and Warnings

Not only does CBP have to pay back eligible importers, it also must do so with interest. The U.S. Chamber of Commerce has published guidance for small businesses navigating the refund process, and CBP has resources available on its website.

One final note of caution: experts warn scammers may try to take advantage of the moment. Any business working with a customs broker should verify that broker's legitimacy before moving forward.

Whitmer Calls for Congressional Action

Whitmer's office said the pain of increased costs from tariffs has not been offset by any of the promised economic gain. The governor continues to call on Congress to set a strategic trade policy that keeps costs down and our economy stable.

"The Michigan Retailers Association welcomed the directive," Vega said. "We're very grateful for the governor's support and helping bring awareness to the impacts that tariffs are having on Michiganders, both on the consumer side and the retailer side."

The directive instructs each of the following departments to submit to the governor within 30 days a report illustrating the way that the use of tariffs has impacted Michigan industries and consumers. The departments include Agriculture and Rural Development, Civil Rights, Environment, Health and Human Services, Natural Resources, Secretary of State, and any other relevant agencies.

The directive also directs state departments to ensure that businesses and employers know how to seek refunds under the process the federal government is developing.

The Path Forward

Michigan's industries have been hit hard, with a recent analysis finding that the tariffs cost U.S. automakers $35 billion last year. Recently, the U.S. Supreme Court ruled unconstitutional the tariffs imposed solely by the executive under the International Emergency Economic Powers Act (IEEPA) without Congressional action.

While the administration has assured the federal courts that they have set aside the $166 billion in unconstitutional tariffs, they have yet to establish a process for returning those funds. Any process must be accessible to all importers who have paid tariffs, including small businesses and individuals who may not have access to expensive counsel to access refunds they are owed.

Despite the uncertainty and disruption driving up prices in our economy and the lack of any Congressional involvement, the administration has not backed down on its use of tariffs. In fact, the administration has imposed new tariffs following the Supreme Court's ruling, as well as maintaining those on steel, aluminum, and other goods.

Michigan's businesses and residents will continue to pay for this costly policy.