Trump’s tariffs, inflation mean IL residents will pay more for these goods, services
AI-generated summary reviewed by our newsroom.
- Illinois faces higher 2026 electricity and health care costs from demand and policy.
- Tariffs now shift 50 to 80% of added costs to consumers as firms pass on levies.
- Beef, coffee and vehicles will likely cost more in 2026 from tariffs and supply.
Illinois residents will likely pay more for a variety of essential goods and services in 2026, including electricity, health care, groceries and others, according to one economist.
Two essential expenses are expected to become pricier this year for reasons unrelated to tariffs. One is electricity bills, Frank Manzo IV, an economist with the Illinois Economic Policy Institute, said in a Jan. 16 interview with the News-Democrat.
“People’s utility bills are likely to rise due to the increasing demand for energy, mostly from data centers, but also because the federal government is now investing less in alternative energy sources,” Manzo said.
Over the next 10 years, Illinois is expected to have about four fewer gigawatts of solar and wind capacity coming online, Manzo continued, which may cause issues as data centers increase their energy use.
Nationally, electricity bills have already increased by 6.7% from December 2024 to December 2025, according to the U.S. Bureau of Labor Statistics. Illinois has seen even steeper increases, Manzo said, and electricity bills are expected to continue to increase this year.
“If we saw another 10% or more increase, it would not be surprising, given current supply and demand,” Manzo said.
In addition to steep electricity bills, the price of health care is also anticipated to rise across the state and nationally this year.
“With the Affordable Care Act credits expiring, insurance premiums have soared for those with marketplace plans,” Manzo said.
As the cost of insurance spikes, the number of uninsured people tends to increase due to unaffordability, Manzo added. That can then lead to further increases in insurance prices as hospitals and agencies pass on the cost of a high uninsured population to those with insurance.
The 12-month overall inflation rate is 2.7%, the BLS reports. If 2026 sees a 2 or 3% overall inflation rate, health care cost inflation is likely to be double that figure, Manzo said.
But what about tariffs on popular consumer goods? Here’s what to know.
What purchases will tariffs affect?
About 50 to 80% of the cost of tariffs is now being passed on to consumers, Manzo said. There’s typically a lag between when tariffs are instituted and when consumers start paying more — businesses may choose to absorb costs at first, hoping the tariffs will be temporary, and they also have to clear out old inventory they purchased pre-tariffs.
“It takes time for businesses to adjust, and so many tariffs enacted last year will manifest fully in prices this year,” Manzo said.
It’s important to note any forecast on tariff price effects is preliminary, Manzo added, as President Donald Trump has made many back-and-forth changes to tariff policies, and the U.S. Supreme Court may also strike down some tariffs.
“Tariffs have outsized impacts on Illinois,” Manzo said. “Illinois is responsible for about 4% of the U.S. economy, but we represent 7% of total imports.”
Kitchen cabinets and upholstered wooden furniture have been affected by tariffs, with a 25% tariff imposed in September. That rate was set to increase to 50% Jan. 1, but has since been delayed to New Year’s Day 2027.
One popular grocery item forecast to become more expensive this year is beef. The U.S. cattle herd has shrunk significantly, and the cost of producing beef has also increased due to increased feed costs and labor shortages stemming from deportations, Manzo said.
While Trump cut the 40% tariff on beef, coffee and other goods from Brazil in November, prices aren’t expected to immediately return to normal. Coffee and chocolate saw price increases last year due to tariffs on goods imported from South America, Manzo said, and canned pineapple from Southeast Asia also got more expensive due to tariffs and climate-related crop shortages.
Egg prices have seen significant relief from spikes around March 2025 and are expected to decrease somewhat this year, though they’re unlikely to reach 2019 or 2020 prices, Manzo said. And if bird flu surges again, prices could soar.
Automobile prices are anticipated to rise in 2026, as Trump threatens new tariffs and customers start seeing increases from previously imposed levies. While the tariffs more directly affect new vehicle pricing, increased demand for used vehicles tends to drive those prices up too, Manzo said.
Do you have a question about the metro-east or Illinois economy for the News-Democrat? We’d like to hear from you. Fill out our Metro-east Matters form below.
