A tricky equation
If undocumented immigrants from Mexico are deported, the effort could backfire
Donald Trump’s victory on Tuesday will create a lot of losers, if he follows through with what he talked about on the campaign trail, and few greater than Mexico. But the international economy isn’t a zero sum game, as Trump seems to believe, and it’s likely the United States would also be harmed by a suffering neighbor.
Let’s just start with deporting undocumented immigrants, which Trump said over and over again he would do before refocusing on “criminal” undocumented immigrants. About 6.5 million of the 11 million people who are here illegally are from Mexico, and if even a few million of those were sent back, unemployment and poverty levels in that country would skyrocket.
“Is Mexico ready to receive 6.5 million people? Not really,” says Tony Payan, director of the Mexico Center at Rice University’s Baker Institute. “It will be a humanitarian disaster, because Mexico doesn’t have the jobs.”
Here’s something we know about illegal immigration: It is propelled by large imbalances
in economic opportunity. People leave countries where there’s no way to make a living for countries where jobs are more abundant, legal or not. That’s what propelled a surge in migration from Mexico after the country experienced an economic crisis in 1994. When the U.S. fell into its own recession, after 2007, migration rapidly trailed off.
Sending people with no jobs and few skills back over the border would deprive America of an essential workforce, to be sure. But it would have even worse economic consequences for Mexico, especially if Trump follows through on another of his campaign promises: Imposing tariffs on imported goods.
The United States buys 80 percent of what Mexico exports. Even under normal trading conditions, Mexico’s economy has only created about 2.9 million jobs over four years, compared with 10.2 million in the United States over the same period. Curtailing the flow of goods would cause massive layoffs, which would propel even more attempted migration, as people face a stark choice: Leave and face a beefed up border patrol, or stay and starve.
“It will engross the ranks of the unemployed and the low-paid,” Payan says. “It’ll be a true disaster.”
The fallout is already beginning. As the Wall Street Journal documented, businesses are putting investments on hold, not knowing if Trump’s new trade policy could render them financially unworkable.
None of this would be good for the United States, first because of the U.S. exports that would be lost if Mexico imposed retaliatory tariffs — hundreds of thousands of jobs in the U.S. depend on those exports. Secondly, it would disrupt the nation’s manufacturing sector, which would that would have to figure out where to find the components it sources from Mexico.
It’s pretty clear that most of those U.S. factories that once made those low-margin components aren’t coming back because costs in the United States are too high — unless the factories have more robots than people.
“Many of the jobs that went to Mexico came out of the very region that constituted the Clinton firewall — Wisconsin, Michigan, Ohio and Pennsylvania,” Payan says. “The reality is those jobs weren’t sustainable in that region.”
The consequences, however, will be most harshly felt south of the border — and in Texas’ border towns, which thrived as the commercial relationships between the two countries grew.
Mexico’s leaders have scrambled to shore up the tumbling peso and will certainly try to forge a working relationship with the president-elect. But if the new U.S. leader fulfills even a few of his campaign promises, the outlook isn’t good.
“From what I can tell,” Payan says, “Mexico has no Plan B.”
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