Trump’s Mass Deportation Plan Would Wreak Havoc on the Economy
U.S. President-elect Donald Trump has vowed to conduct “the largest deportation effort in American history,” no matter the price tag—but the economic costs of such a campaign may be bigger than he has bargained for.
Trump soared to victory in the recent presidential election after campaigning on a hard-line immigration policy and promising to oversee mass deportations, pledging at one point to target between 15 million and 20 million undocumented immigrants. Vice President–elect J.D. Vance has said that the administration would “start with 1 million,” beginning with “the most violent criminals.”
When the former U.S. leader returns to office in January, those plans are certain to face logistic, legal, political, and financial obstacles—all of which have raised questions about what Trump can actually do, and how quickly. But if Trump does succeed in conducting deportations close to the scale that he has promised, economists expect the effort to deal a blow to the U.S. economy, driving up inflation and undercutting economic growth.
“Leaving aside the human issues, leaving aside the law issues, we think that would be very destructive economically,” said Adam Posen, the president of the Peterson Institute for International Economics. “I don’t think people have really understood how potentially big that effect is.”
Around 11 million people are estimated to be in the United States illegally, according to the Department of Homeland Security, a population that accounts for nearly 5 percent of the total U.S. workforce and comprises particularly large shares of the labor force in agriculture, construction, and leisure and hospitality.
As of 2017, an estimated 66 percent of undocumented immigrants had lived in the United States for more than a decade, while some 4.4 million U.S.–born children lived with a parent who was in the country illegally.
The removal of such a sizable labor and consumer force would likely reverberate throughout the U.S. economy, economists told Foreign Policy.
The “mass deportation of millions of people will cause reduced employment opportunities for U.S. workers, it will cause reduced economic growth in America, it will cause a surge in inflation, and it will cause increased budget deficits—that is, a higher tax burden on Americans,” said Michael Clemens, an economist at George Mason University who studies international migration.
While it’s difficult to predict what exactly Trump’s deportation effort will look like, his ambitions are now coming into sharper focus. The president-elect has confirmed his plans to declare a national emergency and enlist the military to carry out the deportations. Stephen Miller, who served as the administration’s immigration czar in Trump’s first term and will be his next deputy chief of staff for policy, has said that the administration will oversee sweeping workplace raids and build “vast holding facilities,” likely in Texas, to detain those who are awaiting deportation.
“We’re already working on a plan,” said Tom Homan—whom Trump has named his next “border czar” and who was formerly acting director of Immigration and Customs Enforcement—in a recent interview with Fox News. “We’re going to take the handcuffs off ICE.”
That will likely entail a steep price tag. Mobilizing the resources to arrest, detain, legally process, then ultimately deport 1 million immigrants per year—as Vance has suggested—would cost some $88 billion annually, according to estimates by the American Immigration Council, an advocacy group for immigrants. Removing all 13.3 million people who are in the United States either illegally or under some sort of revocable temporary status would require $967.9 billion over the course of more than 10 years, the group estimates.
“Deporting a person is very expensive,” said Andrea Velasquez, an economist at the University of Colorado Denver. “That is going to impose a huge fiscal burden,” she added.
And those are just the up-front costs. Undocumented immigrants comprise a major labor force in the United States—particularly in the agricultural sector, where they have accounted for some 40 percent of the farm labor force over the past three decades—often earning lower wages for jobs that the vast majority of American voters say they do not want.
These immigrants are also a major consumer force that spends money and contributes to the U.S. economy in the form of taxes, all while being ineligible for most federal benefits.
There are “the indirect costs of the lost economic contributions, productivity, and taxes of the people who would be removed,” said Julia Gelatt, an expert in U.S. immigration policy at the Migration Policy Institute.
In 2022, for example, undocumented immigrants paid some $96.7 billion in federal, state, and local taxes—the majority of which went to the federal government, according to the Institute on Taxation and Economic Policy.
Given their tax contributions, said Wendy Edelberg, an economist at the Brookings Institution, undocumented immigrants are “really good for the federal budget.” But that’s not always the case for state and local governments, which don’t raise as much in taxes from them but are responsible for supplying schooling and health care. Supporting undocumented immigrants can often be a “net negative” for their budgets, she said.
Texas, for example, shelled out more than $100 million for undocumented immigrants’ emergency hospital care in 2023; New York City Mayor Eric Adams has said that the city’s ongoing migrant crisis could cost some $12 billion over a three-year period.
Proponents of mass deportations, such as Vance, argue that the plan would be economically beneficial for American workers, including by helping to ease the affordable-housing crisis and generating employment opportunities. Given that undocumented immigrants are often working at lower pay, they reason, removing them from the country would push U.S. firms to hire American workers at higher wages.
“People say, well, Americans won’t do those jobs. Americans won’t do those jobs for below-the-table wages. They won’t do those jobs for non-living wages. But people will do those jobs, they will just do those jobs at certain wages,” Vance told the New York Times in October.
“We cannot have an entire American business community that is giving up on American workers and then importing millions of illegal laborers,” he added. “It’s one of the biggest reasons why we have millions of people who’ve dropped out of the labor force.”
Past mass deportations, however, indicate that the scheme may actually harm employment outcomes for American workers. To understand the labor-market impacts of mass deportations, a group of economists, including Velasquez, studied the effects of the Obama administration’s Secure Communities program, which expelled more than 400,000 undocumented immigrants.
Rather than boosting American workers’ job prospects, the study suggested that the Obama-era mass deportations actually cut their employment numbers and wages. With almost half a million undocumented immigrants removed from the labor pool—either through deportations or more indirectly—the economists found that 44,000 U.S.–born workers also lost their employment.
That’s likely because undocumented immigrants and U.S.–born workers often compete for different jobs, so the result of mass deportations is “labor shortages,” according to Velasquez. “That is going to lead to higher labor costs, so now it’s going to be more expensive to produce, and that is going to create a ripple effect that is also going to affect their demand for U.S.–born workers,” she said.
“The idea that removing [undocumented immigrants] causes U.S. workers to rush in and fill the same jobs is a fantasy,” said Clemens, who was not one of the study’s authors.
And it’s not just American labor outcomes that could be affected either; studies suggest that the impacts of mass deportations would likely be felt across the U.S. economy more broadly.
An analysis by the Peterson Institute for International Economics, for example, found that if the Trump administration deported 1.3 million people who are in the country illegally, both the U.S. gross domestic product and overall employment would suffer. GDP would drop 1.2 percent below the baseline scenario, in which there are no deportations, while employment would fall by 1.1 percent by 2028.
In a more extreme scenario, in which the Trump administration deported 8.3 million undocumented immigrants, the economic outlook would be even worse. Compared to the baseline forecast, GDP would plummet by 7.4 percent by 2028, while employment would drop by 6.7 percent.
In both scenarios, deportations would also drive up inflation through 2028, with the agricultural sector being especially hard-hit.
“Take an essential ingredient out of the economy, and the ripple effects extend,” Clemens said.
Trump claims a win on immigration after a call with Mexico’s president. But she suggests no change
WEST PALM BEACH, Fla. (AP) — President-elect Donald Trump declared a win on stopping illegal immigration through Mexico on Wednesday after talking with that country’s leader. But Mexican President Claudia Sheinbaum suggested Mexico was already doing its part and had no interest in closing its borders.
The two spoke just days after Trump threatened to impose sweeping new tariffs on Canada and Mexico as part of his effort to crack down on illegal immigration and drugs.
Trump said Sheinbaum “agreed to stop Migration through Mexico.” Sheinbaum indicated separately on social media that she told Trump that Mexico is already “taking care of” migrant caravans, calling it an “excellent conversation.”
“We reiterate that Mexico’s position is not to close borders but to build bridges between governments and between peoples,” Sheinbaum added.
While the state of the proposed tariffs remained unclear, Trump said in a post on his Truth Social account that this was “effectively closing our Southern Border.” He called it a “very productive conversation.”
The exchange between the two leaders appeared to confirm for Trump the value of threatening to disrupt trade with import taxes. His initial social media post moved financial markets and gave him a response he was quick to describe as a win. Even if the proposed tariffs fail to materialize, Trump can tell supporters that the mere possibility of them is an effective policy tool and continue to rely on tariff threats.
Sheinbaum wrote on social media that the leaders “discussed Mexico’s strategy on migration issues, and I told him the caravans are not reaching the northern (U.S.) border, because Mexico is taking care of them.”
“We also talked about reinforcing cooperation on security issues, within the framework of our sovereignty, and the campaign we are carrying out to prevent fentanyl consumption,” she said.
Illegal migration across the Mexico border is down in part because the Biden administration secured some stepped-up cooperation from Mexico — the sort Trump seems to be celebrating.
Arrivals at the U.S.-Mexico border have dropped 40% from an all-time high in December. U.S. officials mostly credit Mexican vigilance around rail yards and highway checkpoints.
Driven by mounting pressure from the U.S. to block migrants going north, in the past few years Mexican authorities have turned to rounding them up across the country and sending them to southern Mexico, in a strategy seen by experts as an attempt to wear migrants out until they give up.
Neither side clarified the status of the tariffs. But their implementation could fuel higher prices and slow economic growth, potentially blowing up the trade agreement among the U.S., Canada and Mexico that was finalized in 2020 during Trump’s previous time in the White House.
Trump on Monday said he would impose a 25% tax on all products entering the country from Canada and Mexico as one of his first executive orders upon taking office on Jan. 20. He also proposed an additional 10% tariff on China tied to its exporting of materials used in the production of fentanyl.
In announcing his plans, he railed against the flow of fentanyl and migrants crossing into the U.S. illegally, even though southern border apprehensions have been hovering near four-year lows.
On Wednesday, Trump also posted that he plans a large scale ad campaign to explain “how bad Fentanyl is for people to use,” predicting it would educate people on “how really bad the horror of this Drug is.”
The dangerously powerful opioid was developed to treat intense pain from ailments like cancer but has increasingly been mixed with other drugs in the illicit drug supply.
Through September, the United States has imported $378.9 billion in goods from Mexico, $322.2 billion from China and $309.3 billion from Canada.
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