After winning two elections with his immigration promises, Donald Trump’s plan for 2025 presents two changes that could impact the Mexican economy if his immigration requests are not met: a $130 billion deportation program focused on 12 million undocumented immigrants and a 25% tariff on exports from Mexico.
From border wall to domestic policy
During his first term, Trump focused on building a wall on Mexico’s border with the United States. He promised that Mexico would finance it and that his experience in real estate would ensure the success of this project. What actually happened is that only a very small part of the wall was built and it was financed with the budget of the US military.
Now, Trump no longer refers to the border wall and has shifted his focus to domestic law enforcement, through mass deportations of the 12 million undocumented immigrants currently living in the United States. Trump promised to deport 12 million immigrants during his first term, although the actual number was 1.5 million. To put this in perspective, Obama deported 2.9 million immigrants during his first term. 70% of the 1.5 million immigrants deported by Trump were sent to Mexico, straining local resources in border states.
Economic repercussions
Trump assured that he will carry out mass deportations from his first day in office, but he has not given information on how these deportations will be financed. The United States Customs and Enforcement Service reported that deportation costs are $10,854 per person, which multiplied by 12 million amounts to $130 billion. The economic aspect of mass deportations raises serious doubts about their viability.
The Obama administration demonstrated greater deportation capacity. Trump’s new plan faces a unique challenge: countries like Cuba and Venezuela refusing to accept deportation flights. President Sheinbaum’s comments on the possibility of accepting deportees who are not Mexican citizens may represent a significant change in bilateral immigration policies.
This possible agreement can position Mexico as a strategic immigration center, although it raises economic concerns. Mexico’s immigration system is having difficulty managing its current flow of immigration, having suffered a 70% reduction in its budget in 2024.
Business implications
Trump’s proposed tariff strategy reflects his approach in 2019, when he threatened Mexico with increased tariffs unless immigration was reduced. It is currently suggesting an initial tariff of 25%, significantly higher than the 5% it proposed in 2019. This represents a major financial challenge: Mexico exports more than 80% of its products to the United States, which in 2023 represented 493 billion dollars. A 25% tariff rate could greatly affect key sectors such as automotive, agriculture and manufacturing, and would increase the volatility of the peso.
The shift from border wall to economic consequences demonstrates the complexity of immigration policy between countries that share the world’s busiest border crossing. These policies will undoubtedly affect both countries and reshape trade and the labor market on both sides of the border.
*Jasmin Singh is an immigration attorney, based in the United States, specializing in immigration law.
LinkedIn: Jasmin Singh
The opinions expressed are solely the responsibility of their authors and are completely independent of the position and editorial line of Forbes Mexico.
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