Trump's Populist Pledges Fall to US Dependence on Foreign Labor
By Tom Kagy | 22 Jan, 2025

Heated pledges of stiff tariffs and mass deportations will prove no more than a winning election strategy.

It's one thing for a newly elected President to proclaim an agenda premised on absolute US economic self-sufficiency and global military dominance.  It's a different matter to follow through in a world that runs on tight global interdependence of supply and demand, labor and consumption, efficiency and innovation.  In fact, the efficiency of the US economy is founded on about two dozen free-trade agreements that eliminate tariffs or keep them down to sub-10% levels on most products imported from our main trading partners.

Among the more fantastical aspects of Donald Trump's "America First" crusade is the vow to raise tariffs on imports as a way to enrich Americans while bringing China and other trading partners to heel.  His threats of 25% tariffs on imports for Mexico and Canada and upwards of 60% from China is premised on the false notion that international free trade is a blessing bestowed by the US on the rest of the world.  

In reality, free trade has long been defended by several generations of leaders as a bedrock of the high standard of living to which Americans have become accustomed.

A free flow of imports from countries like China and Mexico keep down US inflation to the lowest levels among advanced economies. Every 1 percent market share won by imports from low-income countries like China keeps down prices by more than 2 percent, according to studies by the Mercatus Center which the Wall Street Journal has called "the most important think tank you've never heard of".  

Imposing high tariffs would shatter the budgets of working-class US families who are always the most impacted by inflation.  Ironically, they also happen to be the voters most responsible for returning Trump to the White House.

An equally important fact undermining the benefits of Trump's threatened tariffs is that at least half of all imports aren't consumer goods but components used by US-based manufacturers, according to the Bureau of Economic Analysis. Adding big new tariffs would  undermine the ability of US firms to compete against foreign producers and remain in business.  The US auto industry imports a quarter trillion dollars worth of parts and assembled vehicles, half from Mexico, Canada and China.  Tariffs would weaken US carmakers  by undermining their profitability and ability to invest in new models.

The harm caused by high import tariffs is most evident the US steel industry which has already been abandoned by most large firms because of high labor costs in the US as well as competition from smaller niche firms.  Tariffs on imported raw steel would raise costs for steel-consuming industries, which employ almost 13 million Americans, while arguably easing foreign competition for US steelmakers that employ only 140,000 workers.

Another case study of the lose-lose dynamics of tariffs are those imposed on Chinese-made solar panels between 2012 and 2015, according to the Mercatus Center.  This action prompted China to impose tariffs on American polysilicon, a key component of solar panels.  This raised the cost of solar equipment, hurting jobs and slowing environmental progress in both nations.

The massive economic damage likely to be inflicted by new tariffs is likely to be overshadowed by Trump's pledged deportation of undocumented immigrants.  Surveys suggest he won the election based on his heated rhetoric about mass deportations to rid the US of criminals.  That assertion is discredited by a 2018 Yale study showing that even assuming the widely accepted estimate of 11.3 million undocumented immigrants (based on US Census community surveys) their incidence of crime is only about half that of the general US population.

The criminality asserted by Trump is further undercut by the study's primary finding that, based on 1 million computer simulations of migration patterns, the US illegal migrant population is actually much larger, somewhere between 16 million and 29 million, with a mean figure of 22.1 million.  That would make their crime rate only about a quarter of that of the general US population.  The study also found that the number of undocumented migrants has remained fairly constant since 2008, also discrediting the Trumpian notion of a growing surge of migrants.

Trump's pledge of mass deportations, were they carried out with any degree of success, would deprive the US of well over 10% of its workforce, primarily from the lower end of the economic scale, including 48% of agricultural workers and those in hospitality, construction, manufacturing and healthcare.  These workers do the difficult and tedious work that underpins the core functions of millions of US businesses and support higher-paid supervisory and management positions held by US citizens.  

Deporting even a fraction of undocumented migrants would destroy US food security while decimating countless businesses and the housing market, costing the US economy $8 trillion over the next 14 years, according to a study by the bipartisan business group FWD.us.  What's more, carrying out mass deportations would cost the government $400 to $600 billion and take 20 years.  Another lose-lose proposition that would add to the deficit and inflation, ensuring that Trump's pledge to cut $2 trillion from the federal budget stays in fantasyland.  

The unrealistic nature of Trump's heated pledge to "defend our borders" was revealed January 20 when he shut down the CPB One app that had provided asylum seekers a way to get an appointment to apply for asylum, and canceled all asylum interviews that had already been scheduled.  The app had been set up by the Biden administration as a way to reduce the number of illegal crossings at the southwestern border.  The shutdown sent a clear message to the app's 280,000 daily users that the only way to enter the US would be to join the flow of illegal crossings that Trump had pledged to stop.  As a result the smuggling of migrants across the southwestern border will "skyrocket", confided a Border Patrol agent interviewed.  

Trump's pledges on tariffs and deportations are so farfetched and potentially destabilizing that they will likely be forgotten once the tires of his administration meet the road of reality in which the US is more dependent on foreign labor and immigrant labor than any other major nation. 

And assuming Trump is a wily demagogue and not a world-class cretin with zero memory of his last administration, he may never have intended to actualize his rhetoric but merely used it to extract the votes necessary to retake power.  Sadly, the latter possibility is actually the better alternative for the economic welfare of Americans. 

If Trump does push ahead to actualize even half of his pledges the US economy may well follow on the heels of Japan which, thanks to similar protectionist anti-immigrant policies, suffered over three decades of stagflation since the early 1990s and remains to this day the world's most stagnant major economy.