Trump's Immigration Policies and Economic Impact

According to analysts at Piper Sandler, Donald Trump's immigration policies may cause a significant slowdown in migration rates to the US, impacting growth in the upcoming year.

On the campaign trail, Trump emphasizes immigration as a key issue, proposing various policy measures such as preventing automatic citizenship for children of undocumented immigrants. He promises to revive the 2019 "remain in Mexico" law that requires certain asylum-seekers to wait in Mexico until their processing is complete, a program ended by President Joe Biden.

At a rally on October 13, Trump suggested funding an additional 10,000 Border Patrol agents to bolster border security, contradicting claims from his political rival Kamala Harris that he thwarted a bipartisan proposal for 1,300 more agents.

Trump aims to detain all immigrants crossing the border illegally, ending what he describes as the "catch and release" policy. He hinted at involving the National Guard and local law enforcement in locating and deporting undocumented immigrants, even suggesting the potential use of federal troops, a move likely to face legal challenges. His running mate, JD Vance, indicated that deporting 1 million immigrants annually could be a reasonable target.

While Piper Sandler analysts express skepticism about Trump’s ability to deport millions due to legislative and logistical barriers, they believe his strategies could realistically reduce net migration to the US by approximately two million people. They project Trump's immigration plans may ultimately reduce US GDP growth by 10 to 40 basis points by 2025.

Currently, the US Customs and Border Patrol reports a decrease in illegal crossings, with projections indicating 1.1 million crossings in 2023, down from 1.7 million previously. Analysts estimate a net migration of 2.4 million in 2024, compared to a prior estimate of 3.3 million by the Congressional Budget Office.

(Reuters contributed reporting.)