Immigration Policy and Its Macroeconomic Effects in the Second Trump Administration

American Enterprise Institute

Wendy Edelberg, Stan Veuger, Tara Watson

Research

13 Pages

AEI’s report assesses how immigration policy under a potential second Trump term could affect U.S. macroeconomic conditions. It projects significant reductions in net migration, leading to slower labor force growth, GDP contraction, and fiscal strain. The analysis emphasizes the structural implications and uncertainty surrounding policy outcomes.

Key Takeaways

Net migration may turn negative: Net inflows could range from –525,000 to +115,000 in 2025, shrinking the labor force.
GDP growth may slow: Lower net migration could subtract 0.3–0.4 percentage points from U.S. GDP growth in 2025.
Labor shortages and fiscal pressure: A smaller workforce may strain employment growth and reduce tax revenues, increasing budgetary challenges.
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