Will Trump’s Migration Ban Be A Boost Or Blow To The US Economy? The Experts Weigh In

The 28 November 2025 announcement by Donald Trump – that the US will “permanently pause migration from all Third‑World countries” – sent shockwaves through global talent networks and business circles.

With the policy’s rollout still clouded in legal ambiguity (much like a great deal of Trump’s headline-making announcements), the potential ripple effects on the US economy are drawing keen attention.

For the tech sector and startup ecosystem in particular, the stakes are high: a sudden contraction in immigration could shrink the pool of talent, founders and entrepreneurs that many fast‑growing companies rely on.

On the other hand, lower inward migration might ease competition for some roles. As the dust settles, the real question loom – is this ban a temporary shock, or will it become a structural shift with deep economic consequences?

New Labour Landscape: Constraint, Rebalancing or Something Else?

A sudden tightening of immigration could reshape the US labour market in ways that are difficult to predict. For sectors already dependent on international workers – from software engineering to healthcare to logistics – reduced migration could intensify recruitment challenges and increase competition for specialised skills. That could, potentially, slow growth for startups that rely on agile hiring to scale.

But, some analysts point out that a restricted labour pool might also accelerate trends that are already underway – things like automation, upskilling and greater investment in domestic talent pipelines. Companies could respond by renewing their focus on training programmes, hiring remotely outside the US or tapping overlooked worker groups within the country. In that sense, the ban might catalyse a different kind of innovation – not the kind driven by global mobility, but rather by necessity and adaptation.

Whether this shift becomes a drag on growth or a push toward reinvention remains an open question. The answer likely depends on how long the ban lasts, which industries are affected most and how quickly companies adjust their workforce strategies.

Demand, Spending Power and the Startups Caught in the Middle

Migration doesn’t just influence the workforce – in fact, it shapes population growth, consumer demand and the size of the tax base. A sharp reduction in new arrivals could slow the expansion of local markets, especially in cities where immigrant communities play a key role in supporting housing, retail, food and transport sectors.

For early-stage startups that rely on predictable patterns of population growth or spending behaviour, a shrinking influx of consumers could complicate projections.

On the other hand, some economists argue that stability (even with slower growth) could benefit certain industries. For instance:

• Less pressure on housing demand could actually cool rent spikes in major tech hubs
• Local businesses facing saturation may experience steadier competition
• For founders building products that enhance efficiency rather than scale, a more stable but less dynamic economy might not pose the same risks

But ultimately, the broader economic impact will depend on how consumer confidence shifts, how businesses respond to new constraints and whether states and cities introduce policies that counterbalance federal immigration tightening.

The effects won’t be uniform, and that unevenness is exactly what makes the outlook so complex and unpredictable.

Our Experts

• John Boyd: Principal at The Boyd Company, Inc.
• Marina Shepelsky: CEO, Founder and Lawyer at Shepelsky Law Group
• Itay Simchi: Real Estate Investor and Founder at Proven House Buyers
• Atal Agarwal: Founder and CEO at OpenSphere
• Javier Palomarez: Founder and CEO of the United States Hispanic Business Council (USHBC)

John Boyd, Principal at The Boyd Company, Inc.

“From a corporate site selection and economic competitiveness perspective, I believe Trump’s permanent pause on third-world migration – coupled with a merit based program to attract high-skilled, high-tech foreign talent with STEM skill sets in engineering, AI, quantum computing and advanced manufacturing (the semiconductors sector, in particular) will be a plus for for our nation’s labor market, U.S. productivity and our nation’s ability to compete for high tech and emerging industries.

“The market for low-skilled labor is increasingly susceptible to displacement by AI and automation across the service industry as well as in low-skilled logistics and manufacturing. By limiting the number of lower-skilled workers who often compete directly with U.S. born Americans, the policy reduces downward pressure on wages in those sectors and prepares the workforce to up-skill (or move towards skilled trades, healthcare, first responders, etc.) – in preparation of the changes AI and automation will continue to bring in the months and years ahead.

“Another and often under the radar screen concern of multinational corporations considering a U.S. location is the quality of life and the efficiencies and stability of city and state governments. Uncontrolled migration of low skilled migrants often not only results in crime – but also strains on local social services like housing, education, and healthcare, leading to increased tax burdens for citizens and businesses.

“Trump, embracing the role of the nation’s “chief economic development officer” and deal maker can leverage this initiative to promote the U.S. as a more attractive proposition for corporate investment and high-skilled workers from around the globe – as well as one focused on protecting U.S. workers.”

Marina Shepelsky, CEO, Founder and Lawyer at Shepelsky Law Group 

“The dynamic contributions of immigrants to the labor force have consistently propelled industries forward. This enriches the fabric of the nation’s economy.

“The American workforce is expected to expand by 5.2 million individuals, primarily due to heightened immigration levels. This influx of immigrants is anticipated to contribute to a 2% increase in the economy to the nation’s GDP.

“Immigrant labor has been projected to inject an additional $7 trillion into the U.S. economy over the next ten years. There would be an extra $1 trillion in federal tax earnings.

“Incoming immigrants play a crucial role in maintaining the size of the U.S. population as well.

“In 2023, immigrant households (both legal and undocumented) paid over $650 billion in federal, state, and local taxes. Undocumented immigrant households alone contributed nearly $90 billion in taxes and held close to $300 billion in spending power. These contributions help fund vital programs like Social Security and Medicare even though many immigrants cannot access those benefits. Every immigrant who walks into our office doors wants to work, be productive, and pay taxes to ensure they qualify for legalization.

“Immigrants filled nearly half of new civilian jobs over the past decade and are expected to account for almost all net workforce growth in the next 20 years. Many arrive in their prime working years, helping to offset the retirement of approximately 10,000 baby boomers each day. This ensures industries with worker shortages (like healthcare, agriculture, and construction) can keep operating and growing. Many American scientists and doctors, nurses and medical staff are first generation immigrants.

“First-generation immigrants create about 25% of all new U.S. firms, and in some states, that number exceeds 40%. More than half of U.S. startups with a valuation over $1 billion are immigrant-founded. They have developed roughly 30% of patents in key industries. Over 40% of Fortune 500 companies are immigrant- or first-generation founded.

“The benefits of immigration to the US economy are evident in the way immigrants strengthen the workforce, contribute to taxes, and fuel innovation nationwide.”

Itay Simchi, Real Estate Investor and Founder at Proven House Buyers

“From my experience, restricting migration from developing countries is more likely to hurt the US economy than help it. Many industries that keep America running rely heavily on immigrant labor — construction, agriculture, hospitality, manufacturing, and even parts of tech. In real estate alone, about 30% of construction workers are immigrants, and without them, project timelines slow down and labor costs rise. When labor becomes scarce, housing becomes more expensive, inflation rises, and businesses struggle to grow.

“A pause might protect a small number of local jobs in the short term, but long term it creates labor shortages that ripple through the entire economy.”

Atal Agarwal, Founder and CEO at OpenSphere 

“This will hurt the U.S. economy.

“I came from India on a student visa. Built the COVID-19 Test Finder that 3 million Americans used. Got it integrated with Google and Apple. Then spent years wondering if I’d be allowed to stay.

“Now I run two immigration tech companies. I talk to engineers and founders every day trying to make it here legally. They’re not taking jobs. They’re creating them.

“When we make legal immigration harder, these people don’t disappear. They go to Toronto, London, Singapore. And they take their startups, patents, and tax dollars with them.

“Half of U.S. billion-dollar startups have an immigrant founder. This isn’t about protecting jobs. It’s about whether America wants to keep creating them.”

Javier Palomarez, Founder and CEO of the United States Hispanic Business Council (USHBC)

“Immigrants, particularly those from developing nations, have long been vital contributors to the US economy. They fill roles across essential sectors, including technology, agriculture, construction, and advanced manufacturing. In fact, many of the fastest-growing American companies were founded or staffed by immigrants, and our future workforce increasingly depends on them.

“A permanent pause on migration from third-world countries may sound like a straightforward way to protect American jobs, but in practice, it risks creating labor shortages, slowing innovation, and putting pressure on industries already struggling to hire. At the same time, we do need clear, modern, and enforceable immigration laws that strengthen our labor market and protect American taxpayers.

“The real question isn’t whether migrants help or hurt the economy; they consistently help. The question is whether policymakers can craft balanced, evidence-based solutions that keep America secure, competitive, and growing.”