#16 What If Donald Trump's Tariffs Increased Immigration?

Donald Trump’s economic policy rests on two main pillars: trade protectionism and immigration control. However, these objectives may be at odds with each other. The punitive tariffs he just imposed on Mexico, Canada, and China could paradoxically undermine his goal of controlling irregular immigration. This is because trade and immigration are deeply interconnected: trade allows for cheaper goods to enter a domestic market, while immigration provides cheaper labor to produce these goods domestically. Restricting trade may, in turn, increase demand for immigrant labor.

Margaret Peters from UCLA presents a compelling argument that trade and immigration policies function as substitutes. She suggests that trade openness often leads to more restrictive immigration policies, while trade protectionism can increase immigration. Could Trump’s aggressive tariff policies inadvertently lead to increased immigration rather than reducing it?

The Trade-Immigration Tradeoff

Peters’ core argument is that trade and immigration policies are often inversely related. Historically, when trade is open, labor-intensive firms struggle to compete with foreign producers, reducing their demand for low-skilled immigrant labor. This allows governments to implement more restrictive immigration policies without facing significant business opposition. Conversely, when trade is restricted, domestic industries that rely on cheap labor expand and seek to offset higher production costs by advocating for more open immigration policies.

From the 19th century until the mid-20th century, many countries maintained closed trade policies with high tariffs (a period Trump has hailed as one of great prosperity) but simultaneously had relatively open immigration policies (a point he seldom acknowledges). Since the 1950s, most industrialized nations have pursued free trade while tightening immigration restrictions. Trump’s administration challenges this trend by imposing tariffs and disrupting the international economic order in an effort to protect American industries and revive domestic manufacturing jobs. However, according to Peters’ theory, such protectionist policies could create labor shortages, ultimately increasing the demand for immigrant workers.

How Tariffs Could Increase Immigration

Trump’s tariffs are intended to revive American manufacturing by making foreign goods more expensive (one other possible goal would be to gut the Canadian economy to undermine it as a viable state and annex it, but that’s another story). If successful, they would boost domestic production in industries such as steel, automobiles, and agriculture—all of which require a substantial workforce. However, many of these industries traditionally rely on low-skilled immigrant labor—often undocumented—to keep costs down.

The agricultural sector provides a clear example. American farmers depend heavily on seasonal migrant ...