Trump’s $150 Billion Immigration Crackdown Shrinks Foreign-Born Workforce – What’s Next for the US Economy?

• Why Is Trump’s Immigration Crackdown Shrinking the Labor Force?
• Can Native Workers Really Fill the Gap?
• What’s the Long-Term Economic Impact?
• How Are Industries Reacting?
• Is This Policy Clashing With Economic Reality?
• FAQs: Trump’s Immigration Crackdown & the Labor Market

The US labor market, once hailed by former President Donald TRUMP as proof of his economic prowess, is hitting a wall—built by his own $150 billion immigration crackdown. Foreign-born workers, critical to filling jobs across sectors, are vanishing rapidly. For the third consecutive month, the foreign-born labor force shrank despite 147,000 jobs added in June. This clash between Trump’s aggressive deportation policies and labor market needs has economists warning of long-term GDP slowdowns, wage pressures, and industries scrambling for workers. Here’s a deep dive into the data, the White House’s defense, and why economists say native workers can’t fill the gap.

Why Is Trump’s Immigration Crackdown Shrinking the Labor Force?

The $150 billion "Big Beautiful Bill" isn’t just funding border walls—it’s turbocharging deportations, detention centers, and ICE operations. Politico calls it the largest immigration enforcement push in decades. The result? A sharp drop in migrant encounters at the Southwest border and a shrinking foreign-born workforce. In June, the US added 147,000 jobs, but the foreign-born labor pool contracted for the third straight month. Industries like agriculture and hospitality, which rely heavily on immigrant labor, are sounding alarms. Even Trump has privately admitted to aides that business owners are panicking about worker shortages. Meanwhile, the Congressional Budget Office (CBO) projects that reduced immigration will weaken long-term economic output, despite potential short-term wage bumps for native workers.

Can Native Workers Really Fill the Gap?

The WHITE House insists they can. Stephen Miran, Trump’s top economic advisor, argues that 8% unemployment among 20–24-year-olds and 14% jobless rates for teens mean there’s a "large labor supply waiting to be activated." His solution? Tax cuts for overtime work and stricter Medicaid work requirements. But economists aren’t buying it. Daniel Zhao of Glassdoor notes, "If the labor market shrinks, economic growth will follow." Federal Reserve Chair Jerome Powell echoed this, warning lawmakers that slowing workforce growth directly drags GDP. The Deutsche Bank reports the equilibrium job-growth rate could plummet to 50,000/month—far below Biden-era levels—if immigrant labor dries up. Case in point: During the pandemic rebound, surging immigration boosted GDP without spiking inflation, per CBO data.

What’s the Long-Term Economic Impact?

A conservative-leaning American Enterprise Institute study warns that net migration declines by 2025 could slash GDP growth by 0.3–0.4 percentage points. That’s a massive hit for an already cooling economy. The CBO adds that while tighter labor markets might raise wages slightly, the trade-off is lower productivity and innovation. Historically, immigrant workers fill critical roles in construction, healthcare, and tech—sectors where native worker participation hasn’t kept pace. For example, in 2023, immigrants accounted for 18% of the US workforce but 33% of STEM job growth, per Census data. Without them, automation or offshoring may fill gaps, but not quickly enough to avoid economic drag.

How Are Industries Reacting?

From Florida’s "Alligator Alcatraz" detention facility to Iowa’s farmlands, the crackdown’s Ripple effects are clear. Trump’s immigration czar, Tom Homan, demands "more agents, beds, and transport planes" to deport migrants. Yet farmers and hoteliers—key Trump constituencies—are begging for exemptions. Dairy farms, for instance, face milking delays without immigrant labor, risking spoilage and revenue losses. Construction firms report project slowdowns as native workers reject grueling jobs even at higher pay. The BTCC analytics team notes similar labor crunches in crypto mining, where immigrant technicians often maintain energy-intensive rigs. "You can’t tax-cut your way out of a demographic cliff," quips one economist.

Is This Policy Clashing With Economic Reality?

Absolutely. Trump’s team claims Biden’s job gains were "fake" due to "unchecked undocumented flows." But data shows immigrant labor fueled post-pandemic growth without inflation spikes. Now, the Fed faces a dilemma: Slower workforce growth means fewer rate hikes, but sticky wage pressures could prolong inflation. Markets are already pricing this in—TradingView charts show volatility in labor-sensitive stocks like Home Depot and Tyson Foods. Even red-state governors are quietly lobbying for guest-worker expansions, while the White House doubles down. As one GOP strategist admits, "This is a political win but an economic time bomb."

FAQs: Trump’s Immigration Crackdown & the Labor Market

How much is Trump spending on immigration enforcement?

The "$150 billion Big Beautiful Bill" funds border security, deportation flights, and detention centers—the largest such investment in decades.

Which industries rely most on immigrant labor?

Agriculture (37% immigrant workforce), hospitality (28%), construction (23%), and healthcare (18%), per Bureau of Labor Statistics data.

What’s the CBO’s forecast for immigration’s economic impact?

Reduced immigration could lower long-term GDP growth but may slightly boost native wages, per a 2024 CBO report.

Are native workers replacing immigrants?

Not at scale. Unemployment rates for young Americans remain high, but sectors like farming see labor mismatches even with wage hikes.

How does this affect crypto markets?

BTCC analysts note immigrant tech labor supports mining operations. Shortages could disrupt hash-rate growth in Texas and other mining hubs.