Trump to freeze migration from 'Third World' countries: "We will have high inflation as a result of the move"

CGTN Europe

CGTN Europe interviewed Vicky Pryce, International Economist and business consultant

Transcript

00:00Donald Trump has vowed to permanently pause all migration from what he called Third World countries.

00:06This comes after one of the two National Guard soldiers, allegedly shot by an Afghan national on Wednesday, died of her injuries.

00:13The suspect had entered the country legally in 2021 after working with the U.S. government, including the CIA, in Afghanistan.

00:21The president says he also plans to end federal benefits and subsidies for non-citizens.

00:26Let's talk now to the international economist and business consultant, Vicky Price.

00:30Good to see you, as always, Vicky.

00:32So this idea from Donald Trump suggests preventing certain people coming to the U.S.

00:36and possibly looking again at the status of some people who are already settled there.

00:40What effect might that have on economic growth and U.S. GDP?

00:45Well, it depends, of course, what sort of numbers we're talking about.

00:48But it has also to be looked at in relation to everything else that's going on in the attempts, of course,

00:54to reduce the number of people who are in the U.S., either illegally or those that President Trump seems to think

01:00shouldn't have been there in the first place anyway.

01:03So there is an issue of size, but there is no doubt that if you do try and reduce immigration,

01:10it does affect particular areas of the economy.

01:14We've seen that already happen in agriculture in the U.S., but also it affects construction, hospitality sectors.

01:19So there could be shortages in a number of areas.

01:22And also, of course, from some of those third world countries, who wouldn't call them that,

01:26there are quite a lot of skilled workers coming in normally, which help increase the skill level in the U.S.

01:33Vicky, I'm going to ask you to pause because I can see you need to have a sip of water.

01:36So please do do that.

01:37And I want to ask you a little bit more about the job market.

01:39So I'll bear with you until you're ready.

01:40I can see you're taking a little glug.

01:42So please do go for it.

01:43So, I mean, obviously, the job market is one area that will be affected.

01:48We could see perhaps more jobs being available, but perhaps in roles that wouldn't necessarily be easily filled,

01:54that are currently being filled by those people who are immigrants to the U.S.

01:59That's absolutely right.

02:00And thank you for being so kind about this.

02:02My voice suddenly went.

02:04We had a budget here in the U.K.

02:05And, of course, I've been talking nonstop.

02:07So, yes, one of the things is, of course, the reduced labor supply in a number of areas.

02:11So shortages will emerge.

02:13The question is, what does that do to wages or to anyone who's there?

02:16And, of course, the cost of businesses.

02:18And that is one of the important aspects in lowering immigration anyway.

02:23So, I mean, it is true that there will be some increase in the wages of the people who are there.

02:29So if there are fewer of them and you still need to produce a certain amount of product,

02:34then their wages could be going up.

02:36But, of course, that is a problem for the firms that are employing them or for the sectors that are employing them.

02:40And some of the skills that will be missed as well are going to affect productivity in the economy.

02:45So the overall estimate is that we're going to have perhaps higher inflation as a result and also, of course, lower growth.

02:52So for this particular policy, the latest one that has been introduced, it depends how long it lasts,

02:59whether then there are other changes that happen to fill some of the posts that perhaps will not be filled if that immigration is reduced.

03:07So is there going to be availability from somewhere else?

03:10So you can't just do a sort of if A, then B, then C in economics and just run a line and assume that this is what's going to happen

03:18because there could be all sorts of other things that happen as a result to offset some of those costs to businesses that would happen that way.

03:26So there is no doubt an issue there.

03:28And the other thing is, of course, you know, if you are continuing with a policy that we've got there now,

03:34it's the sort of fiscal cost, how exactly you manage it.

03:38Obviously, you need more sort of support to ensure that some of the people do not enter that would otherwise have done.

03:43So you're also looking at what you do about revoking some of the visas.

03:48So this isn't just a very simple thing that can be done.

03:50It does require some extra spending to get there, but actually it can be negative for the economy as a whole.

03:57Vicky, thank you so much for coming on the programme and battling on.

04:00It was great to speak to you as always.

04:02That's the international economist, Vicky Price.

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