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If the US president fulfills his promise to deport all illegal immigrants, the American economy will fall by 8%. Bloomberg writes this, citing economists.
“President Donald Trump’s immigration policies are likely to have a devastating impact on the growth and profits of Corporate America, but investors have not yet been deterred — largely because they do not believe he will fully implement his plans,” the publication says.
According to analysts, mass deportations are likely to deal a painful blow to a wide variety of sectors of the US economy - the tourism sector, the service sector, some sectors of agriculture, food production, industry, and construction.
However, there is an opinion among experts that in his actions, Trump will still look at key economic indicators, in particular stock market indices, so as not to really harm the economy.
“People are very quick to forget that there is often much more talk than actual execution. So we don’t want to over-extrapolate what could be a short-term flash,” said Todd Alsten, chief investment officer at Parnassus Investments, commenting on the initial news of the deportations of illegal immigrants.
In addition to Trump's tendency to make excessive promises that cannot be fulfilled, analysts are also somewhat reassured by the fact that many of his actions will be blocked in the courts and face funding problems, since Trump himself has promised to cut federal spending.
According to estimates by strategists at Jefferies LLC, in theory Trump could deport 1-2 million illegal immigrants per year. But that is not the same as quickly deporting 11 million people. That is how many illegal immigrants are believed to be living in the United States.
Assuming Trump actually kicks out 11 million low-wage workers, it would cut America’s gross domestic product by 8%, according to a Bloomberg Economics analysis. That would lead to a drop in production in industries that rely heavily on cheap labor. To replace them, companies would have to raise wages, making their goods and services more expensive. That would trigger a wave of inflation.
Trump targets illegal immigrants
As I wrote, on the eve of his inauguration, Trump announced the largest deportation in U.S. history. He said border security would be a prominent part of his first executive orders.
Indeed, immediately after returning to the White House, Trump ordered the closure of the southern US border and the start of deportations of illegal immigrants.
The first batches of illegal migrants began to be flown to Mexico. After Colombia refused to accept a plane carrying Colombian migrants, Trump imposed sanctions on the country.
