Why Trump’s Deportation and Tariff Policies Will Hurt America

Donald Trump has run for office on economic populism and returning the economy to pre-pandemic levels. He is the candidate of nostalgia. He has promised that, “Under my plan, incomes will soar, inflation will disappear completely, jobs will reemerge and the middle class will thrive like never before.” Such is the national nostalgia that polls consistently show Trump has more confidence in the economy than Vice President Kamala Harris, though a recent poll from Echelon Insights Finally, Harris is in charge on the economy. What is often missing from discussions about Trump is the damage his policies would have on the economy. His proposals on deportations and tariffs would be a disaster for America. This is why.

Trump’s deportation policy will hurt workers

Trump has said: “They are poisoning the blood of our country, that is what they have done.” He doesn’t like immigrants. He has vowed to carry out the “largest domestic deportation operation in American history” on the first day of his presidency, aiming to remove an estimated 15 to 20 million illegal migrants, about 8.3 million of whom are believed to be in work in the labor market. . For context, the United States has approximately 50.6 million international migrants, approximately 15.1% of the population. That amounts to removing 30% to 39.5% of the migrant population. This deportation plan will be modeled after “Operation Wetback,” a 1956 campaign under the Eisenhower administration that deported 1.3 million people, using “military tactics” to round up and deport Mexican immigrants. Trump’s plan would use a combination of local law enforcement, the National Guard and the standing military to achieve his goals, moving “thousands of troops currently stationed abroad” to the U.S.-Mexico border and to invoke the Insurrection Act of 1807 to allow the military to arrest illegal immigrants. He will also allow ICE agents to raid workplaces instead of just targeting individuals. These unauthorized migrants will be denied a fair trial, as will anyone suspected of links to members of drug cartels and criminal gangs. Finally, large detention facilities will be built to house all these migrants while they are processed for deportation. Not only is this an inhumane and nightmarish plan, it is also a populist bomb dropped on the economy. A recent article by scientists at the Peterson Institute for International Economics (PIIE), viewed

“two mass deportation scenarios and find that both produce lower US GDP and employment through 2040 than otherwise – that is, compared to baseline projections, or compared to what would have happened without the deportations. US inflation is higher through 2028, the four years of a second Trump presidency. The scenarios differ only in the degree of damage caused to people, households, businesses and the economy as a whole.”

The impact would be greatest in agriculture and industry, where the largest share of migrant workers exists. This is because there are no American workers ready to take over these jobs. In fact, America’s population would be showing the same signs of decline as Europe’s if not for the country’s openness to migration, as economists Stephen J. Dubner and Zeke Hernandez discussed on the agenda. Freakonimics podcast. So in one scenario, a removal of 0.8% of the labor force would result in reduced agricultural and manufacturing productivity, a broader decline in GDP, and, perversely, overall employment would fall. In other words, migrants create jobs for other workers, and removing migrants removes jobs and productivity and lowers wages. These shocks would also increase inflation, rather than lower it, which is hardly a return to the pre-pandemic fantasy that Trump is promising.

Rates are not logical

The promise of tariffs is intuitively appealing: If we make it expensive to buy products from other countries, Americans will have to buy American products, and surely that’s a good thing for jobs, and for those companies? However, that is not what happens. First of all, the tariffs hurt the poor: if you want a cheap car, and the Chinese have cheap electric cars, it’s bad for your wallet if you’re forced to buy a more expensive American car, and you’ll find yourself can’t afford that car at all. . Tariffs are also bad for the companies they aim to protect: By making imports more expensive, companies no longer have to fight to make cheaper goods, which reduces innovation and makes those companies harder to compete abroad. In fact, according to the PIIE article, in their scenarios

“Both of Trump’s tariff plans – imposing 10 percentage points of additional tariffs on US imports from all sources and 60 percentage points of tariffs on imports from China – will harm US GDP and employment by 2028, with or without retaliation from trading partners. But the effects vary by sector, with sustainable manufacturing taking the biggest hit – the opposite of Trump’s stated goals.”

In fact, this will hurt not only workers, but also Mexico and Canada, who will face a stronger dollar, which will make American products more expensive for them, which in turn will make it harder for American companies to export goods . The researchers explain that

“If tariffs are imposed, imported goods become more expensive and demand for them decreases. Lower demand for foreign goods means lower demand for the foreign currency needed to purchase these imports, making the U.S. dollar stronger. As a result of the decline in demand for foreign currencies, the dollar appreciates by 5.4 percent against all countries.”

Trump’s promises and his policies contradict each other. His policies will hurt the very people he claims he wants to help, it will hurt America, it will lead to inflation, high unemployment, declines in GDP and in our productivity and competitiveness.