Here’s something I don’t say often: President Trump is right.

Not about everything, of course. And he may not stay right. But last week, Trump said something about immigration and the economy that was right on target. He just needs to take one more step.

First, a little background.

Back in February, I wrote about US dairy farmers who were concerned their workers would be deported. One said this:

“Let’s say the people in Washington could wave a magic wand and make all these [immigrants] disappear—you’d have dead cows piling up outside the dairy farms. The industry would die a horrible death within 48 hours. Because no one would be there to slaughter the cows, let alone milk them.”

Initially, this concern seemed unfounded. Instead of grabbing farm workers, the new administration had focused on removing aliens it thought (sometimes wrongly) were criminals. The public generally supported this approach. The immigration issue faded while we all talked about tariffs.

Then something changed.

In late May, Trump deputy chief of staff Stephen Miller told Immigration and Customs Enforcement (ICE) officials their arrest numbers were too low. Concentrating on the troublesome aliens wasn’t enough. 

“Federal agents needed to ‘just go out there and arrest illegal aliens,’ Miller told top ICE officials, who had come from across the US, according to people familiar with the meeting.

“Agents didn’t need to develop target lists of immigrants suspected of being in the US illegally, a longstanding practice, Miller said. Instead, he directed them to target Home Depot, where day laborers typically gather for hire, or 7-Eleven convenience stores. Miller bet that he and a handful of agents could go out on the streets of Washington, DC, and arrest 30 people right away.” (WSJ) 

ICE agents got the message. They began sweeping California farms as well as Latino neighborhoods in Los Angeles, arresting undocumented workers who weren’t committing other crimes. This ignited protests in those communities, some of which turned violent. 

The administration initially seemed to welcome the conflict. Officials talked tough, calling out the National Guard and Marines to help. But that produced headlines like this:

Source: The Wall Street Journal

Economically, this wasn’t a surprise. Scaring a significant population segment to withdraw from normal activity harms everyone. Big brands noticed a drop because undocumented workers are also consumers. Like them or not, they’re critical to the economy.

These concerns appeared to reach the president, who posted this June 12 note on his Truth Social network.

As usual, Trump covered a lot of ground here. Let’s unpack it.

First, he noted aggressive immigration enforcement is depriving certain industries of valuable workers. He mentioned farmers and hotels, but we can also add restaurants, meatpackers, and construction. All depend heavily on immigrants, many of them undocumented.

Second, he said these workers are “almost impossible to replace.” This is correct. While unemployment is creeping up, there’s still not much slack. Losing immigrant workers hurts American workers, too.

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Third, the president said, “We must protect our farmers, but get the criminals out.” I think pretty much everyone would agree. We don’t like thugs. We like peaceful, hard-working neighbors.

After Trump posted that note, ICE HQ sent this e-mail to regional offices.

“Effective today, please hold on all work site enforcement investigations/operations on agriculture (including aquaculture and meat packing plants), restaurants and operating hotels.”

The message further told ICE agents not to arrest “noncriminal collaterals,” which means people who are undocumented but not known to have committed crimes.

So, it seems ICE will return to its focus on criminal aliens—though we should note the order doesn’t cover every industry. Construction is an obvious omission. The fact that it specifies operating hotels suggests unfinished hotels are still fair game.

Another way to look at this: Trump is giving amnesty to favored employers, letting them freely hire undocumented workers… for now. It’s a temporary amnesty that could end at any time.

This is a bit like his tariff orders, which I wrote last month are all temporary. It may seem to solve a problem but paralyzes business activity. This immigration amnesty is similar; workplace raids could easily resume tomorrow or next week. No one should assume otherwise.

What the economy really needs, for both trade and immigration, is stability. That means policies written into law, so the rules are clear. Then everyone can adapt.

A stable, effective immigration policy would have:

• Strict border enforcement and
• A legal way for US employers to hire well-screened foreign workers when needed.

Last year, Senate Republicans proposed a bill to do that. Democrats liked it, too. Imagine—bipartisan agreement on a hot-button issue like immigration. But the bill went nowhere because Donald Trump killed it.

Has Trump changed his mind? No one knows. Congress is busy with other things, so any such bill is unlikely anyway.   

Meanwhile, the current aggressive enforcement will, if it continues, produce significant economic damage.

Some of the president’s supporters still want to remove all aliens, not just criminals. Stephen Miller certainly does. He has the president’s ear… but so do some Republican business groups who think differently.  

Whatever Trump decides will have major consequences.

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See you at the top,

Patrick Watson
@PatrickW

P.S. If you like my letters, you’ll love reading Over My Shoulder with serious economic analysis from my global network, at a surprisingly affordable price. Click here to learn more.

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