Impact of Trump’s Immigration Policies Loom Over Businesses

If you were to rank the policy issues that have defined President Donald Trump’s political career, immigration would appear at the top of the list. Immediately after taking office for his second term, Trump showed what his hard line on immigration would look like, and some business interests appear wary.

Within 48 hours of his inauguration, Trump had already issued a smattering of immigration-related executive orders with stated objectives such as “protecting the meaning and value of American citizenship” and “guaranteeing the states protections against invasion.” They include directives on matters like security of the border between the United States and Mexico, “enhanced vetting” of visa applicants and an effort to terminate birthright citizenship for U.S.-born children of parents with temporary visas. (Jackson Walker and Ogletree Deakins are among the law firms that have issued summaries of the orders.)

Such measures may score political points for Trump with voters, but they appear ready to throw a wrench into the gears of modern-day capitalism in the U.S. and abroad. Many economists are quick to point out, for instance, that immigration drives growth in the supply of labor in the U.S. An Economic Policy Institute estimate pegged the growth rate of the domestic labor market at 12.6% in 2023, but that mark fell to 0.5% when immigrants were excluded. And immigration has played a key role at the top of corporate America, too: The 10 most valuable U.S.-based public companies were either founded by immigrants and children of immigrants, or they have an immigrant sitting in the CEO chair.

Meanwhile, could a “brain drain” of skilled workers be afoot in the U.S. as immigration policies shift? Global competitors in countries such as Canada and Australia could capitalize on the number of suddenly displaced workers from the U.S. That must pose a distressing threat to U.S. companies in sectors of the economy where they hold a tenuous grip on the market over their foreign counterparts.

There are also the less obvious risks arising from Trump’s immigration orders. Some companies that operate in Mexico have no compunction about making payoffs to the country’s cartel gangs to ensure they can continue doing business there. However, that practice could now leave companies open to enforcement action in the U.S. with cartels classified as foreign terrorist organizations. Then there are the potential disruptions to companies’ operations domestically in the wake of mass deportations of workers.

For the most part, publicly traded companies have stayed mum about the possible fallout from Trump’s immigration agenda. In one public filing, California-based RingCentral Inc., which provides business communications services, described the risk to its business posed by changes to the H1-B visa program. Such changes could “could restrain the flow of technical and professional talent into the U.S. and may inhibit our ability to hire qualified personnel,” according to the company.

Keep an eye out for similar comments about immigration policy from other companies in public filings to come – RingCentral certainly won’t be the last.