Trump's immigration crackdown hurts US economy, can pull down GDP growth: Analysis

US President Donald Trump’s immigration crackdown may please right-wing extremists but it is bound to extract a substantial economic toll.

Trump’s mass deportation campaign could lead to US gross domestic product (GDP) growth falling by 0.3–0.4 percentage points in 2025, according to an analysis by American Enterprise Institute (AEI).

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Trump’s crackdown on immigrants, which has gone way beyond targeting law-breakers to simply rounding up people based on race, has not just rattled blue-collar industries that rely on immigrant workers, but has also sent ripples across the Wall Street.

Economic costs of Trump’s immigration agenda

Even beyond 2025, the US economy is expected to face “significant downward pressure on growth” in the labour force and employment as a result of Trump’s immigration agenda, according to the AEI analysis.

Monthly payroll employment growth could be near zero or negative in the next few years, the analysis further said.

There have already been reports of shortage of workers in farming and food processing industries that have relied heavily for decades on immigrants, including illegal immigrants.

The
raids by the Immigration and Customs Enforcement (ICE) have wrought havoc on the agriculture sector and up to 70 per cent of farm workers in some parts of the United States have stopped showing to work, according to The Daily Telegraph.

The shortage of workers have led to rotting crops in fields and labour shortages in meat-processing plants, directly affecting availability of food to the public.

Trump’s immigration crackdown reaches Wall Street

The crackdown is not just limited to blue collar workers but has also affected white collar businesses.

Business Insider has reported mergers and acquisitions (M&A) are now factoring in Trump’s immigration agenda in selecting companies.

The outlet also reported that companies are also cautious about hiring overseas workers and are cautious about travel plans.

Notably, the Trump administration now requires social media review for visas and people are being increasingly denied entry to the United States over criticism of the Trump administration.

“For firms that rely on talent from abroad and travel across borders to strike deals, the stakes are high. While no one’s been grounded yet, anxieties are mounting in some corners, leading to more cautious travel plans and cross-border hiring pivots. It’s also changing the M&A landscape, with more dealmakers scrutinizing immigration compliance before agreeing to buy a US company,” noted Alex Nicoll, Bradley Saacks, and Kaja Whitehouse for Insider.