Noah Smith: Trump’s immigration lockdown will weaken America

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These are hard times for pro-immigration forces in the U.S. President Donald Trump has seized upon this moment of confusion and distraction to issue a 60-day ban on most green card applications — suggesting that the administration has been just as intent from the start on targeting legal immigration as well as the illegal variety. Trump’s leading anti-immigration adviser, Stephen Miller, has said that Trump will try to extend this ban indefinitely, shutting down most immigration by administrative fiat. And with tensions with China ratcheting up over coronavirus and other issues, immigration opponents such as Republican Sen. Tom Cotton are proposing a ban on Chinese students studying science and technology at U.S. universities.

Even if Trump’s new ban is struck down by the courts and former Vice President Joe Biden beats him in the fall election, the economic downturn caused by the pandemic probably will depress migration for years. The U.S. has been especially hard-hit by coronavirus, and will almost certainly suffer a painful and lasting depression. That will make it a less appealing destination for international talent, which could flow to less-hard-hit places such as Canada and Australia.

But coronavirus is only putting the finishing touches on what was already a highly successful campaign of immigration restriction by the Trump administration. Years of nativist rhetoric and administrative harassment had already led to a sharp reduction in the net number of foreigners moving to the U.S., from more than 800,000 in 2017 to only about 200,000 in 2018. A series of Trump administration policy changes had already stanched the flow of Central American refugees to the U.S.

Trump isn’t the only reason immigration to the U.S. has fallen. The big wave of Mexican immigration that began in the 1980s ended a decade before he took office. The Secure Fence Act of 2006 effectively built a border wall, while the Secure Communities program beefed up internal security and deportations during the Obama administration. Meanwhile, Mexican fertility rates dropped sharply, and the Mexican economy improved modestly, reducing the pressures on Mexicans to migrate north for work. This combination of push and pull factors caused the Mexican-born population in the U.S. to fall by hundreds of thousands in the mid-2000s and early 2010s:

Because of the end of the Mexican wave, overall low-skilled immigration to the U.S. plummeted. High-skilled immigration, however, remained robust:

Most of these educated immigrants came from Asia. Asian immigration surpassed Latin American immigration in the mid-2000s, and Asian Americans were on course to become the country’s largest foreign-born ethnic group. That wave may also have waned in time, as better economic opportunities in China and India created alternatives to the American dream. But Trump’s restrictionist policies have choked it off prematurely.

So U.S. immigration is being curtailed by a remarkable confluence of events — economic growth and fertility decline in other countries, the political success of American nativists and the coronavirus pandemic. These will combine to produce a long-lasting immigration pause similar to the one that started in the 1920s, when nativist laws — and later the Great Depression and World War II — choked off immigration for a generation.

In the short term, reduced immigration probably won’t affect the economy very much. In normal times, high-skilled immigration boosts local labor markets and tax revenues, while low-skilled immigration leaves these largely unchanged. But with employment and growth constrained by pandemic and depression, even skilled immigration is unlikely to spur economic growth. Usually, the presence of skilled immigrants helps create knowledge clusters in urban areas, where ideas can be easily exchanged and local employers have access to a deep talent pool; but when everyone is working from home, these local effects don’t matter. And tax revenue will be constrained by business failures and closures. The main sector that will suffer in the short term is, ironically, the medical system because of shortage of foreign nurses who want to come to the U.S. to help treat coronavirus patients

In the long term, the results of a generation-long immigration pause will be more apparent. Because of the U.S.’s falling fertility and population aging, fewer young workers will be available to support retirees. More places in the middle of the country will empty out, becoming half-inhabited ghost towns full of resentment and heroin. The information technology and biotechnology industries, unable to recruit the best and brightest from India and Nigeria and Vietnam, will cut expansion plans, move operations overseas or simply lose out to competitors from China and elsewhere. And scientific research, the backbone of U.S. prosperity and industrial supremacy, will decline without the foreign graduate students and visa workers who support the research system.

The impact on the U.S.’s ability to compete with China will be especially severe. With only a quarter the population of its great rival, the U.S.’s not-so-secret weapon was always its ability to keep its population growing through immigration and sustain its tech-industry leadership by recruiting skilled foreigners. With immigration halted, the U.S. will have very few advantages in the technological, scientific, economic and geopolitical cold war that is shaping up. Those in the Chinese government who seek to supplant the U.S. as the world’s leading power can only be pleased with this turn of events.

Immigration was always going to slow, but there was no need to close the country off in the same way as in the 1920s. The results of Trump’s actions will not be felt immediately, but eventually they will erode the foundations of what makes the U.S. an exceptional nation.



Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

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