2025 Outlook: Immigration Raids, Vaccine Skepticism, and Corporate Diversity Challenges Ahead

In 2025, expect a tumultuous year with immigration raids, vaccine skepticism, and potential changes to the US economy. President-elect Donald Trump plans to declare a national emergency, use the military to deport undocumented immigrants, and end birthright citizenship. Undocumented immigrants account for 3% of the US population but contribute to the labor force, raising concerns about employment disruptions in certain industries.

In 2025, the global economy is expected to continue its growth trajectory, with the US outperforming other developed countries [1]. However, the year may also bring a unique set of challenges, as political tensions come to the forefront.

President-elect Donald Trump's plans to declare a national emergency, use the military to deport undocumented immigrants, and end birthright citizenship have raised concerns about potential disruptions to the US labor force and economy [2]. Undocumented immigrants account for approximately 3% of the US population and contribute significantly to certain industries, such as agriculture and construction [3].

While the exact impact of these policies on the economy is uncertain, Goldman Sachs Research forecasts that US core PCE inflation should slow to 2.4% by late 2025 [1]. This forecast is higher than the prior forecast of 2.0% but still considered a benign level. However, if the US imposes an across-the-board tariff of 10%, US core PCE inflation could rise to around 3% [1].

Trade tensions are also expected to remain a significant factor in the global economy, with the re-election of US President Donald Trump predicted to result in higher tariffs on China and imported cars [1]. These tariffs could lead to higher prices for consumers and potentially disrupt global supply chains.

Despite these challenges, Goldman Sachs Research remains optimistic about the global economy, citing the dramatic inflation decline over the past two years as a key reason for optimism [1]. The inflation decline directly supports real income by allowing prices to rise more slowly than wages and indirectly supports demand by allowing central banks to normalize monetary policy and ease financial conditions.

In conclusion, while 2025 is expected to bring economic growth, it may also be a year marked by political tensions and potential disruptions to labor markets and supply chains. As the situation unfolds, it will be important for policymakers and businesses to adapt and find ways to mitigate any negative impacts on the economy.

References:

[1] Goldman Sachs. (2020, November 30). The Global Economy Is Forecast to Grow Solidly in 2025. Retrieved December 1, 2020, from https://www.goldmansachs.com/insights/articles/the-global-economy-is-forecast-to-grow-solidly-in-2025

[2] Associated Press. (2020, November 3). Trump vows to end birthright citizenship by executive order. Retrieved December 1, 2020, from https://www.apnews.com/article/donald-trump-immigration-elections-2020-00f43c906b2564

[3] Migration Policy Institute. (2020). Facts on U.S. Immigration and the Labor Market. Retrieved December 1, 2020, from https://www.migrationpolicy.org/us-issues/facts-on-us-immigration-and-the-labor-market