GOP Links Immigration Crackdown to Lower Inflation, Affordable Housing

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Republicans are venturing into new political territory, arguing that cracking down on immigration could help combat inflation and make housing more affordable. This emerging narrative suggests that a Donald Trump-led tightening of immigration policies in 2025 could alleviate high prices, particularly in the housing market.

The Republican platform, revealed ahead of next week’s convention in Milwaukee, lays out this case, asserting that the next president should secure the southern border and deport millions of undocumented immigrants. The rationale is that illegal immigration has increased the cost of housing, education, and healthcare for American families.

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Many economists and Democrats remain skeptical, believing that Trump’s broader economic policies, including tariffs and tax cuts alongside immigration restrictions, might actually trigger a resurgence in inflation. Studies have underscored these concerns, suggesting that such measures could disrupt market stability.

However, the GOP argument is gaining traction within conservative circles. EJ Antoni from the Heritage Foundation noted that increasing a community’s population by 5% through immigration could lead to a 10% rise in rents. Antoni highlighted areas along the southern border and major cities as the most impacted.

During a Senate hearing this week, Federal Reserve Chair Jerome Powell expressed doubts about the connection between immigration and inflation. He suggested that while immigration might have a neutral or even positive effect on inflation in the short term by loosening the labor market, certain regions could experience higher housing costs due to an influx of new residents.

Trump’s immigration policies have sparked a multifaceted debate. Barbara Doran of BD8 Capital Partners pointed out on Yahoo Finance that deporting millions of immigrants could remove workers who help keep wage pressures low. Meanwhile, Sen. J.D. Vance pushed back against this notion during an exchange with Powell, arguing that higher wages for Americans should be a priority.

The GOP’s latest talking points also echo sentiments recently observed in the United Kingdom. Huw Pill, the Bank of England’s chief economist, stated that substantial immigration increases have pressured the UK’s housing stock more than higher interest rates. Studies in the U.S. similarly suggest that immigration might enhance home values due to the overall positive economic impact.

Nevertheless, should Trump return to office, the GOP plans to double down on strict immigration policies, including what the platform terms “the largest deportation operation in American history.” This stance is part of a broader strategy to present a more voter-friendly face on various social and economic issues.

In their new platform, Republicans have attempted to smooth over contentious campaign promises that have raised concerns among economists and business leaders. The document offers moderate language on trade and tariffs, diverging from Trump’s campaign trail promises of steep tariffs on Chinese goods and other trading partners.

Notably, the platform does not reiterate the longstanding GOP push to repeal Obamacare, instead continuing Trump’s aggressive support for the fossil fuel industry with widespread calls for increased drilling.

As Republicans prepare for next week’s convention, they aim to capitalize on perceived weaknesses in President Biden’s recent debate performance. Antoni anticipates that voters will increasingly focus on immigration’s impact on inflation, with Republicans meticulously honing this argument to ensure public awareness.