President Trump’s Day 1 immigration policies focus on hardening the border, mass deportations, and ending birthright citizenship.
Wendy Edelberg, director of the Hamilton Project and senior fellow at the Brookings Institution, joins Catalysts to explain how these measures could impact GDP.
"We estimated the GDP effects through two channels," Edelberg explains. "One, what would happen to the reduction in labor supply just from less immigration? But also, what would happen from less consumer spending?"
Edelberg says if you "add up both of those effects and you think about a realistic but dire scenario for immigration in 2025, that reduces GDP growth by almost a half a percentage point."
She also highlights that despite Trump’s support for legal immigration, his previous term saw policies that restricted it, which could deter skilled immigrants and create a "stark decline in economic activity," especially in immigrant-dense areas.
These policies will affect Americans in various ways. "Immigrants have a relatively large footprint in the agricultural industry, for example, so I would absolutely expect a reduction in immigration to result in higher prices of agricultural goods, of the kind of food that you buy at the grocery store," Edelberg explains. "But on the flip side, I can imagine there being reduction in prices where immigrants are demanding fewer goods and services … fewer immigrants in this country is going to mean less demand for places to live. That could put downward pressure on rent prices."
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