UCLA

Abstract: President Trump campaigned on “making America great again” through trade and immigration restrictions. I argue that it is difficult for policymakers to restrict both trade and immigration because of trade’s effects on business support for immigration. When trade is restricted, more low-skill intensive goods are made in the US, leading to more demand for low-skill immigration from businesses. As businesses are relatively powerful, we should expect immigration to open. Conversely, when trade opens, fewer low-skill intensive goods are made in the US, leading to the closure of the firms that produce these goods. This reduces demand for low-skill labor and, with it, the demand for low-skill immigration. As business demand for immigration recedes, policymakers restrict immigration to appease anti-immigrant groups. Using data on immigration and trade in the US, I show that this relationship has held over US history. At the end of the article I hypothesize several reasons why Trump’s tariffs are not leading to more demand for immigration due to their limited effects on trade and the job market.