On the other side of Trump’s isolationist agenda is his notorious rally cry to build a wall along the southern border of the US to keep out migrants from Mexico and other Latin American countries. Trump touts that a wall between the US and Mexico is of vital importance to the safety of all Americans and routinely disparages “sanctuary cities” for not cooperating with federal immigration authorities. This belies the fact that studies suggest immigrants commit violent crimes at a substantially lower rate than native-born Americans. Trump’s other resolutions to stem migrant flows to the US also use the security and safety of Americans as justification. His calls for “a total and complete shutdown of Muslims entering the United States” and an end to family-based immigration in response to acts of domestic terror were also in the name of keeping Americans safe.
Research suggests, however, that closed trade and closed borders are not complementary policies that Trump can simultaneously pursue. In her research on trade and migration published in 2014 and 2015, Margaret Peters produced findings that suggest trade policy affects the composition of firms in the economy and their need for low-skilled labor. Protectionist measures such as those pursued by Trump inherently push an economy inward as tariffs and non-tariff barriers increase the price of exports and encourage domestic consumers to purchase locally produced goods and domestic producers with higher costs to enter the market. In other words, trade restrictions result in an increase in production in labor-intensive industries. As Peters notes, this leads to an uptick in the amount of low-skill labor demanded in labor-scarce nations such as the United States as any gains that might be realized from government protectionist measures would be offset by a simultaneous increase in wages. Given that immigrant labor is usually cheaper than native labor (and, as Peters states in her 2015 piece, tend to be low-skilled laborers), firms in response lobby representatives for more generous immigration policies or for subsidies to stay in business. Indeed, Peters’ results show that Congress votes for tighter immigration controls when trade is open and for more lenient controls when trade is restricted. As closed trade leads to an increase in production in labor-intensive industries, business interests have incentives to push for open migration in order to capture the cost benefits of low-skilled foreign workers. The relationship between trade and immigration policies trending in opposite directions is so strong that Peters is able to find evidence dating back to the 1780s. As trade is restricted, borders are open by economic necessity and as trade is liberalized, politicians are less generous with immigration quotas as firms can now offshore their production costs.
What does this mean for Donald Trump? He’s already had to shell out $6 billion in relief to farmers hit hard with retaliatory tariffs from China (which, as Peters points out, is exactly what Alexander Hamilton argued would happen were the US to erect tariffs). Coca-Cola also announced it will need to raise its prices in response to rising aluminum costs as a result of Trump’s tariffs and Harley Davidson has announced plans to move production to Europe in order to avoid retaliatory tariffs. Ford CEO Jim Hackett says that Ford has already lost around $1 billion in profit due to the tariffs while Walmart and Target have stated a planned price hike on their products due to increased input prices as a result of Trump’s tariffs. While it’s plausible Trump could offer financial packages to these companies to offset costs or keep them in the US, the US budget deficit has already increased by 17% this year to $779 billion and more than 70% of Americans have expressed the budget deficit should be a top-three priority, indicating Trump may be fast approaching the ceiling for his bailouts.
If Trump is steadfast on maintaining protectionist measures, then he must be willing to give ground on immigration and refugee restrictions. With a caravan of migrants fleeing poverty and violence making progress to the US border, Trump may be in prime position to offer the US economy relief from his current trade standoffs with other countries. An influx of low-cost, low-skilled workers would provide immediate relief to US industries hit by retaliatory sanctions. If scholars are right, Trump must choose between building a wall against migration and building a wall against international trade. Research suggests that one will have to give in the long run.