The Spillover of Trump’s Immigration Action

The US, a nation enriched by its ethnic and racial diversity, has been facing an influx of challenges since Trump’s second term began, with his immigration policies at the forefront of the disruption. The federal government has nearly halted refugee admissions, implemented travel bans affecting 19 countries, tightened visa application screening, and attempted to eliminate birthright citizenship – a protection rooted in the US Constitution.

For months, the Immigration and Customs Enforcement (ICE) have been detaining individuals – whether unauthorised or with valid documents. Alongside this endangering the lives of the affected individuals, it is also having catastrophic impacts on the US economy. 

Last year, population growth across the US slowed to 1.8 million – the lowest rate since the Covid-19 pandemic. 40% of counties experienced a net loss of people, as more people moved out of the US in 2025 than entered it, for the first time in over a century, with net migration sitting at around minus 200,000.

The downward population pressure will have lasting impacts. Consumer spending by immigrants is predicted to fall by $10 billion this year, monthly employment growth could turn negative, and GDP growth will be 0.1 to 0.3 percentage points lower.

The construction, agriculture, and hospitality sectors account for 9% of US GDP, and rely heavily on migrant labour to make up a substantial proportion of the labour force. For example, roughly 42% of crop farm workers lack legal authorisation to work. An agricultural sector without immigrant workers would struggle to exist and depend on imports.

The wider implications of the crackdown can be seen in the hospitality industry, of which migrants make up 20% of the workforce. 55% of restaurant operators report negative impacts in recent months due to immigration reinforcement activity, 25% are having difficulty hiring and retaining workers, and 18% of existing workers are not showing up out of fear.

This fear is not only inhibiting staff, but also consumers, with sales and customer traffic declining by a striking 37%.

Such industries dependant on migrant labour could experience slower growth and increased wages, which may trigger inflationary pressures across the economy.

The loss of critical workers is also hitting the world’s largest firms. The $100,000 fee for new applicants to the H-1B Scheme for specialised workers has hindered multinationals’ abilities to bring top engineers, consultants and scientists from across the globe to US headquarters. Such a reduction in talent mobility is causing firms, and even clients, to consider relocating elsewhere, particularly Canada and the UK.

Many in the White House are in favour of recent events, believing the US is in the process of returning to the ‘golden age’ – an era from the 1920s to 1965 characterised by its strict national-origins quota system. 

Stephen Miller, Trump’s deputy chief of staff, advocates that during the period when the US had negative migration, the country “Went through a depression together. They went through world wars together. They landed on the moon together.”

However, the US’ previous ability to bounce back from negative migration cannot be translated to its current climate. In the sixties, gaps in the labour force were filled with women entering it, while today, such gaps will only be made larger by the ageing population and lower birth rate. If continued, the US could experience the detrimental population decline seen in Japan, which would really debilitate the economy.

There are also political differences between the 1920s and current age. Then, there was a strong consensus in favour of closing the border. Now, opinion in Congress is split, leaning slightly toward pro-immigration. 

Thus, the unlikelihood of legislative action has meant that Trump has felt it necessary to detain people in the streets and advocate for a reduction in legal migration too. Yet, this can only be changed by Congress, where there appears to be little appetite for reform.