In a recent note, economists at Goldman Sachs looked at the potential impacts of US immigration policies before and after the upcoming election, examining scenarios under a continued Biden administration and a potential second Trump administration.
Net immigration to the United States rose to nearly 2.5 million last year, which significantly boosted labor force and GDP growth while helping to ease wage pressures. For 2024, Goldman Sachs estimates net migration will reach about 2 million, double the pre-pandemic trend rate.
However, the outlook depends on many political decisions before and after the elections. President Biden's latest changes, announced on June 4, aim to restrict a channel that could hold 700,000 migrants a year at current unauthorized migration rates.
“However, we believe the ultimate impact will be a small fraction of this, as most affected migrants are likely to attempt other routes to entry,” Goldman economists wrote. “Legal challenges to the new rules may prevent implementation altogether.”
If President Biden obtains a second term, the administration is expected to maintain current immigration policies with minimal changes. Goldman noted that the new asylum restrictions, while intended to reduce net unauthorized migration, face legal and logistical challenges “but could reduce net unauthorized migration and limit the potential for upward migration surprises this year.”
The policy would put a daily limit on the number of 2,500 unauthorized migrants encountered outside official ports of entry, with any excess being expelled back across the border. Given reports that the daily average reached 3,500 in May, that limit is likely to be met immediately, meaning that US authorities “will expel detained migrants across the border, rather than releasing many of them into the United States to await an appointment.” “The court.”
Goldman Sachs notes that several groups are excluded from this policy, such as unaccompanied children, victims of severe trafficking, and other vulnerable migrants. Furthermore, this policy does not apply to asylum seekers at official ports of entry, where many of those affected by the new policy will likely redirect their efforts.
In contrast, a second Trump administration will likely pursue tougher restrictions on immigration. The range of outcomes under this scenario is wide because of the potential for major policy shifts and legal battles.
Goldman Sachs outlines two basic scenarios for net migration under Trump:
1) High-end scenario: If courts block major changes in asylum policies and limit the impact of deportations, net migration could decline to about 1.5 million in 2025. This number would still be double the 2017-2019 average reported by the Congressional Budget Office (CBO). ).
2) Low scenarioIf the Trump administration succeeds in implementing significant reductions in asylum applications and humanitarian parole, and enacts a more comprehensive deportation program, net migration could fall below the 2017-2019 average of 700,000 per year, and perhaps close to zero temporarily.
“However, it seems unlikely that net migration will be negative on an annual basis even in this scenario,” the economists said.
The Trump administration's proposed deportations face the highest degree of uncertainty, with potential deportations ranging from 300,000 to 2.1 million in 2025, according to Goldman Sachs.
