What will the economy look like with half as much immigration?

Key Takeaways

• Since President Trump’s election, immigration has dropped dramatically. The U.S. is now on track to receive half the number of immigrants per year as it did before the pandemic.
• The Trump administration is not increasing the pace of deportations but fewer refugees come to the country.
• The slowdown may affect industries that heavily depend on immigrant workers, such as agriculture and homebuilding.

President Donald Trump's crackdown on the border has cut immigration to half its pre-pandemic rate, according to a new analysis.

Elsie Peng is a U.S. economist with Goldman Sachs. She wrote in an article on Tuesday that the U.S. was on track to receive 500,000 new immigrants in 2025. That’s down from 1 million immigrants per year in the years before the pandemic. It’s also a steep decline from late 2023 at the peak of immigration when the rate was 3.5-4 million people per year.

Trump’s presidential campaign focused heavily on reducing immigration. He took several steps to tighten border security shortly after he was inaugurated. Goldman did not see a significant increase in deportations as of February, despite his promise to deport those already in the country. The decline in net migration was instead driven by the “collapse”, or reduction, of refugees and immigrants without visas and green cards.

The reduction in immigration may have a major effect on the economy. Especially if many immigrants who are in the country without authorization, stop working because they fear being deported.

Some industries, such as agriculture and homebuilding rely heavily on immigrant workers and may experience slowdowns or cost increases. Goldman Sachs forecasts that the Gross domestic product, a measure economic output, will increase 0.1 percentage points less this year than it would if immigrants continued to arrive at a rate of 1 million per year.