In the coming days, voters will choose between two presidential candidates with sharply different approaches to immigration policy, and this decision could have a significant impact on the U.S. economy.
A recent report projects that a second Trump presidency, with its proposed sharp reduction in immigration, could lower GDP growth by about half a percentage point—or roughly $130 billion—by 2025 compared to a Harris presidency. This is a notable difference, especially since economic growth is expected to be around two percent next year.
A decrease in immigration, as advocated by Trump, would result in a smaller workforce, meaning fewer people producing goods and services. If net migration turns negative under a Trump administration, the report estimates that employment growth would slow by approximately 60,000 jobs per month in 2025. With fewer people in the U.S., consumer spending would also drop. Immigrants, who would likely face a more hostile environment under Trump, would further reduce their spending, leading businesses to cut back on investment and hiring. This reduction in demand would contribute to slower economic growth.
On the other hand, the analysis suggests that a Harris administration, with a more moderate approach to immigration, would have a smaller impact on GDP growth in the near term.
The findings come from detailed projections of immigration flows under both candidates. These projections consider different scenarios for high and low immigration, based on each candidate’s policy proposals and past actions. These forecasts not only account for the number of immigrants, but also factors like age, skill level, and work authorization, which influence the broader economy.
In the low-immigration scenario under Trump, the report predicts that GDP growth in 2025 would be 0.4 percentage points lower compared to current levels of net migration. Meanwhile, in a high-immigration scenario under Harris, GDP growth could increase by 0.1 percentage point. Other scenarios fall between these two extremes.
Over a longer period, differences in immigration policy could have even more significant effects. Immigration plays a crucial role in the U.S. labor force, and under a Trump presidency, the U.S. population would likely grow by about three million due to immigration over the next decade. Under Harris, that number could reach 10 million. As a result, by 2029, the economy under Harris could be about one percent larger than it would be under Trump. To put this in perspective, a one percent increase in GDP is roughly equivalent to the impact of the 2017 Tax Cuts and Jobs Act.
These estimates are conservative and do not account for potential negative impacts on business confidence or investment from the large-scale deportations that Trump has proposed. They also don’t consider the positive effects of immigration on innovation and entrepreneurship, which researchers have linked to higher economic growth.
However, no analysis can account for all variables. Unexpected events—such as a downturn in the economy or a large-scale humanitarian crisis—could influence immigration patterns. For example, recent years have seen significant migration from Venezuela, triggered by political and economic turmoil.
Despite the uncertainties, one thing is clear: immigration policy will remain a major factor in shaping the U.S. economy. While comprehensive reform from Congress seems unlikely in the near future, the next president will have significant influence over immigration policy. This creates uncertainty for businesses, investors, and individuals, particularly immigrants and their families, who could face dramatic changes in policy starting in January.
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