During his 2024 presidential campaign, Donald Trump promised to carry out mass deportations of immigrants living in the U.S. without legal status. Now that he's in office, his administration is increasing enforcement to make this happen. But what impact will this have on the economy?

Experts warn that removing even 7.5 million undocumented workers could shrink the U.S. economy significantly. A study by Warwick J. McKibbin, an economics professor at the Australian National University, published in 2024, found that deporting these workers would cause a sharp drop in labour supply, especially in key industries like mining, agriculture, services and manufacturing. As a result, the country’s Real GDP could fall by 12%. At the Peterson Institute for International Economics, academics Warwick McKibbin, Megan Hogan, and Marcus Noland discussed the "Migration Restrictions and Damages to the US Economy," emphasising the financial consequences of deportations: 

Real GDP in a 7.5 million worker deportation scenario: -12%, while in a 1.3 million worker deportation scenario is -2.1%. Inflation in a 7.5 million worker deportation scenario is 7.4%, while in a 1.3 million worker deportation scenario, it is 1.3%. Employment (hours worked) in a 7.5 million worker deportation scenario is -8.1%, whereas in a 1.3 million worker deportation scenario, it is -1.4%.

Trade balance: 7.5 million worker deportation scenario: 3.9%, 1.3 million worker deportation scenario: 0.7%. Durable manufacturing employment: 7.5 million worker deportation scenario: -43.7%, 1.3 million worker deportation scenario: -7.0%. However, since January 2025, the US Immigration and Customs Enforcement (ICE) has been detaining and preparing to deport between 600 and 1,100 immigrants each day. This is a significant increase compared to September 2024, when the Biden administration recorded an average of 282 immigration arrests per day.

"The current trend would place the Trump administration on track to apprehend 25,000 immigrants in Trump’s first month in office. On an annual basis, this is about 300,000 – far from the 'millions and millions' of immigrants Trump promised to deport. A lack of funding, immigration officers, detention centres and other resources has reportedly impeded the administration’s deportation work," said Francisco I Pedraza, professor of political science at Arizona State University, Jason L Morín, professor of political science at California State University, Northridge, and Loren Collingwood, associate professor of political science at the University of New Mexico in a separate report published February 18, 2025.  

The Trump administration is asking Congress for $175 billion over the next four years to strengthen immigration enforcement, according to a report by Axios on February 11, 2025. If large-scale deportations take place, food prices may go up. Many industries in the U.S., especially agriculture, rely on immigrant workers, including those without legal status. Although undocumented immigrants make up about 5% of the total U.S. workforce, their presence is much higher in certain industries.

The U.S. Department of Agriculture states that nearly half of all farmworkers do not have legal documentation. Many of these workers perform specialised tasks, such as planning planting and harvesting schedules or operating farm equipment like tractors and irrigation systems. If they are removed, food production could decrease, leading to higher prices at grocery stores and restaurants. "With fewer workers to pick fruits and vegetables and prepare food for shipment and distribution, domestic food production could drop, pushing up prices and increasing reliance on imports. National estimates suggest that between 10% and 15% of restaurant and food preparation workers are undocumented immigrants," the researchers wrote on The Conversation.

The construction industry is also at risk. Almost 25% of construction workers don’t have legal authorisation, and many focus on homebuilding tasks like flooring, roofing, and drywall installation. Without them, housing projects could slow down, leading to higher costs when affordability is already a big concern. Deporting immigrants, according to Trump and his supporters, would save money by lowering the demand for public services like temporary shelters and schools. "It’s not a question of price tag," Trump told NBC News in November 2024.

"We have no choice. When people have killed and murdered, when drug lords have destroyed countries, they’re going to go back to those countries because they’re not staying here." Experts, however, question the economic rationale behind mass deportations. "First, immigrants are filling labour shortages and doing jobs that many Americans don’t want to do, often in difficult or low-paid conditions. Even if Americans were willing to take these roles, there simply aren’t enough available workers to replace those who would be deported," the researchers said.  

With fewer workers available, businesses might have to pay higher wages, leading to increased costs for both companies and customers. Industries that depend on credit, like home and car loans, could also be affected since undocumented immigrants help keep the financial system stable by regularly making their payments. "Undocumented immigrants pay more than $96 billion in federal, state and local taxes each year while consuming fewer public benefits than citizens. They are not eligible for Social Security, Medicare, or many safety net programmes like food assistance," the researchers said. Looking at past cases can help us understand what might happen on a national level.

In 2011, Alabama introduced HB-56, a law that required police to check the immigration status of drivers and made it illegal for landlords to rent homes to undocumented immigrants. Workplace raids also led many immigrants to leave the state. As a result, Alabama’s economy took a hit, losing between $2.3 billion and $10.8 billion per year due to worker shortages and lower economic activity. Major disruptions could occur in Nevada, where more than 10% of the population lives in homes with at least one undocumented immigrant.  "In our 24-hour economy, we know that these hotels and casinos could not, should not, would not be able to open every day without immigrants," AP quoted Peter Guzman, president and CEO of the Latin Chamber of Commerce in Nevada.  

According to the American Community Survey published in 2021, undocumented Indian immigrants in the U.S. have a combined spending power of $15.5 billion and contribute $2.8 billion in tax revenue. Indian immigrants are the third-largest group of undocumented workers in the country, following those from Mexico and El Salvador. U.S. authorities estimate that around 18,000 Indian nationals have entered the country illegally. However, the actual number remains uncertain.

Different organisations have provided varying estimates. The Pew Research Centre and the Centre for Migration Studies of New York estimate that there were 700,000 undocumented Indians in 2022. The Migration Policy Institute suggests the number is around 375,000, while the Department of Homeland Security’s official data states it to be 220,000. On February 5, the first group of 104 deported Indian nationals arrived in Punjab. A second batch of 116 landed on February 17 at Amritsar International Airport. More deportations are expected in the coming months.

The National Cathedral in Washington's Bishop Mariann Edgar Budde urged Trump to reevaluate mass deportations last month.  According to Pew Research, there are 6.3 million households in the United States that include at least one undocumented immigrant. This situation directly impacts more than 22 million people. Among these households, 86% have either a householder or a spouse who is undocumented. Additionally, 70% of these households include lawful immigrants or U.S.-born residents. Furthermore, 1.3 million adults in the U.S. were born to parents who were undocumented immigrants.