Mass Deportations Under Trump Threaten to Slow U.S. GDP Growth by 1%

The U.S. economy may lose as much as $238 billion in growth over the next 12 months as President Donald Trump’s immigration policies reshape the labor force, according to S&P Global Ratings. The firm estimates the impact could shave 0.5 to 1 percentage point off GDP, on an economy valued at $23.8 trillion.

Satyam Panday, S&P’s chief U.S. economist, said shrinking population and weaker household spending are the main drivers of the slowdown. “If fewer people are renting homes or buying groceries, that directly subtracts from GDP,” he noted.

Since January, the Trump administration has deported more than 400,000 immigrants, with the Department of Homeland Security expecting the number to reach 600,000 by year-end 2025. The White House has also introduced a $100,000 fee for H-1B skilled worker visas, sparking turmoil in the tech sector that depends heavily on foreign talent.

S&P projects net immigration will fall from a record 2.8 million in 2024 to 400,000–500,000 per year, though Panday warns the real figure may be closer to zero. The American Enterprise Institute goes further, forecasting negative net migration, between 115,000 and –525,000 this year. According to the Pew Research Center, the U.S. foreign-born population has already dropped by more than one million since January.

Economists say the crackdown could hit industries like agriculture and construction, which rely heavily on immigrant labor, pushing up costs and slowing growth. Research firm Capital Economics believes the drag from immigration policy could exceed the impact of Trump’s trade tariffs.

While the booming AI and automation sectors may cushion some losses, S&P expects GDP growth to slow to 1.9% in 2025 and 1.8% in 2026, down from an average of 2.8% in recent years. Panday estimates the recession risk has risen to 25–30%, about double the long-term average. Trump’s vow to reshape immigration - a core promise of his presidency is now colliding with economic reality. As one economist put it, “You can’t grow an economy by shrinking its workforce, the math doesn’t work.”