Economy
What are Trump’s hard-line policies doing to US labor, tourism?
President Donald Trump’s stepped-up immigration and trade policies appear to be rippling through the U.S. economy, creating strains in labor markets and deterring millions of foreign visitors in a downturn that analysts warn could extend well beyond the summer.
Preliminary Census Bureau data analyzed by the Pew Research Center show that more than 1.2 million immigrants disappeared from the U.S. labor force between January and July. That includes people who are in the country illegally as well as legal residents.
Immigrants make up almost 20% of the U.S. workforce and play an outsized role in several industries. Pew data show that 45% of workers in farming, fishing and forestry are immigrants, along with 30% of construction employees and 24% of service workers. In health care, immigrants represent about 43% of home health aides, raising concerns about potential shortages as the population ages.
The loss in immigrant workers comes as the nation is seeing the first decline in the overall immigrant population after the number of people in the U.S. illegally reached an all-time high of 14 million in 2023.
“The influx across the border from what we can tell is essentially stopped, and that’s where we were getting millions and millions of migrants over the last four years,” said Pia Orrenius, a labor economist at the Federal Reserve Bank of Dallas.
“That has had a huge impact on the ability to create jobs,” Orrenius noted, stressing that immigrants normally contribute at least 50% of job growth in the U.S.
On the ground, the effect is visible.
Farmers in California’s Central Valley and in Texas’ McAllen say smaller harvest crews and heightened fear of Immigration and Customs Enforcement (ICE) raids have disrupted operations. Some crops, including melons and citrus, were left to rot in fields when laborers stayed away.
“In May, during the peak of our watermelon and cantaloupe season, it delayed it. A lot of crops did go to waste,” said Elizabeth Rodriguez, director of farmworker advocacy for the National Farmworker Ministry.
Construction sites in parts of California and Texas have also gone quiet.
An Associated General Contractors of America review found job losses in about half of U.S. metropolitan areas. The largest loss of 7,200 jobs was in the Riverside-San Bernardino-Ontario, California, area. The Los Angeles-Long Beach-Glendale area lost 6,200 jobs.
Contractors say they could hire more people if not for tougher immigration enforcement.
Construction sites in and around McAllen also “are completely dead,” Rodriguez said.
Unions are raising alarms about the impact on long-term care, where immigrants make up about 43% of home health care aides, according to Pew senior researcher Stephanie Kramer.
The Service Employees International Union (SEIU) represents about 2 million workers in health care, the public sector and property services. An estimated half of long-term care workers who are members of SEIU 2015 in California are immigrants, said Arnulfo De La Cruz, the local’s president.
“What’s going to happen when millions of Americans can no longer find a home care provider?” De La Cruz asked. “What happens when immigrants aren’t in the field to pick our crops? Who’s going to staff our hospitals and nursing homes?”
Trump campaigned on a promise to deport millions of immigrants working in the U.S. illegally. He has said he is focusing deportation efforts on “dangerous criminals,” but most people detained by ICE have no criminal convictions. At the same time, the number of illegal border crossings has plunged under his policies.
Civil rights advocates and labor groups argue the raids have spread fear well beyond those targeted.
Lots of travelers skip U.S.
The Trump administration’s posture is also reverberating internationally.
A decline in foreign visitors has rattled the U.S. tourism industry, which, before the pandemic, was among the world’s most lucrative.
Buffalo, N.Y., where Canadian tourists usually provide a reliable summer boost, saw traffic fall sharply despite a marketing campaign offering gift card giveaways.
The campaign was meant to show Buffalo’s northern neighbors they were welcome, wanted and missed. At first, it seemed like it might work, said Patrick Kaler, CEO of the local tourism organization Visit Buffalo Niagara. More than 1,000 people entered the giveaway. But by the end of July, it was clear the city’s reliable summer wave of Canadian visitors would not arrive this year.
Buffalo’s struggle reflects a broader downturn in international tourism to the U.S. that travel analysts warn could persist well into the future. From northern border towns to major hot spots like Las Vegas and Los Angeles, popular travel destinations reported hosting fewer foreign visitors this summer.
“To see the traffic drop off so significantly, especially because of rhetoric that can be changed, is so disheartening,” said Kaler.
Experts and some local officials attribute the trend that first emerged in February to Trump’s return to the White House. They say his tariffs, immigration crackdown and repeated jabs about the U.S. acquiring Canada and Greenland alienated travelers from other parts of the world.
Nationwide, the number of overseas visitors, a category that doesn’t include travelers from Mexico or Canada, fell by more than 3 million in the first seven months of the year, according to preliminary government data.
As a tourist generator, Western Europe was down 2.3%, with visitors from Denmark dropping by 19%, from Germany by 10%, and from France by 6.6%. A similar pattern surfaced in Asia, where the U.S. data showed double-digit decreases in arrivals from Hong Kong, Indonesia and the Philippines. Fewer residents of countries throughout Africa had also traveled to the U.S. as of July.
The World Travel & Tourism Council projected that the U.S. would be the only country among 184 studied where foreign visitor spending would decline in 2025. The finding was “a clear indicator that the global appeal of the U.S. is slipping,” the global industry association said.
Since returning to office, Trump has doubled down on some of the hard-line policies that defined his first term, reviving a travel ban targeting mainly African and Middle Eastern countries, tightening rules around visa approvals and ramping up mass immigration raids.
At the same time, the push for tariffs on foreign goods that quickly became a defining feature of his second term gave some citizens elsewhere a sense they were unwanted.
“Perception is reality,” said Deborah Friedland, managing director at the financial services firm Eisner Advisory Group.
Travel research firm Tourism Economics, meanwhile, predicted this month that the U.S. would see 8.2% fewer international arrivals in 2025, an improvement from its earlier forecast of a 9.4% decline but well below the numbers of foreign visitors to the country before the COVID-19 pandemic.
Analysts cited rising travel costs, political uncertainty and a perception of hostility to foreigners.
That perception has already led to cancellations.
International competitors began pulling out of the world finals of the International Lindy Hop Championships, saying they felt unwelcome, event co-producer Tena Morales said. About half of the attendees each year come from outside the U.S., primarily from Canada and France, she said.
Contest organizers are considering whether to host the annual competition in another country until Trump’s presidency ends, Morales said.
“The climate is still the same and what we’re hearing is still the same, that (dancers) don’t want to come here,” she said.
The nation’s capital, where the Trump administration in recent weeks deployed National Guard members and took over management of Union Station, has also noticed an impact.
Local tourism officials have projected a 5.1% dip in international visitors for the year.
“The world’s biggest travel and tourism economy is heading in the wrong direction,” Julia Simpson, the World Travel & Tourism Council president and CEO, said.
“While other nations are rolling out the welcome mat, the U.S. government is putting up the ‘closed’ sign.”
Türkiye said on Tuesday it plans to complete the liquidation of about half of the investment funds caught up in last month’s market turmoil by the end of this week.
The crisis began after several funds said they could not meet investors’ redemption requests during a market sell-off. That prompted a wide investigation into suspected price manipulation in a number of thinly traded stocks.
The Capital Markets Board (SPK) suspended trading in 131 funds run by seven asset management companies and placed them into liquidation, affecting nearly half a million investors.
Seventeen funds run by three of the companies, A1 Capital, Bulls and Pardus, were settled last week, with a total of TL 6.4 billion (nearly $130 million) paid back to 43,643 investors, the Communications Directorate said.
The statement came following a meeting of the Fund Coordination Board, set up to oversee the liquidation process.
The three companies have 49 other funds holding a total of TL 34.1 billion lira, and the board aims to finish liquidating them this week, the directorate said.
If it does, all 66 funds run by the three companies will have been settled. They cover 45,745 people and TL 40.5 billion lira, in cash and in kind.
The statement said a bill meant to make the liquidation fair, transparent and effective, and to give payments a legal footing, was submitted to parliament on Friday. It is expected to be discussed on Wednesday at Parliament’s Planning and Budget Committee. The bill gives priority to money market funds and small investors.
Once it becomes law, the aim is to complete interim payments quickly for the other 65 funds still in liquidation, the statement said. These belong to the four remaining companies, Tera, Pusula, Hedef and Atlas, which are due to go through the extraordinary liquidation process set out in the bill.
Vice President Cevdet Yilmaz, who chairs the board, has said the bill would provide for interim payments of up to TL 1 million of principal and that fewer than 100,000 investors would be waiting once it passes.
Prosecutors have arrested more than 80 people in a related investigation into suspected market manipulation.
The EU sought Tuesday to downplay its reliance on Russian fossil fuel imports after Moscow boasted of its sales, seizing upon the controversy sparked by a U.S. decision to buy Russian diesel.
Russia said on Monday it had sold European countries more than $320 billion worth of hydrocarbons since 2022, despite sanctions imposed over the war in Ukraine.
European countries purchased $21.3 billion worth of Russian hydrocarbons in the first nine months of 2026 alone, Russian Deputy Prime Minister in charge of energy Alexander Novak said on television.
“In other words, despite sanctions-related restrictions, we continue to supply energy resources in certain areas for which exemptions have been granted,” Novak added.
He said Russian oil exports may reach their pre-war levels by the end of the year.
The European Commission responded by providing a lower figure – $209 billion since the invasion of Ukraine in February 2022 – and stressing that the 27-nation bloc was working toward ending all Russian gas imports by the end of 2027.
“We are in this for the long term and that trend is very clear,” commission spokesperson Anna-Kaisa Itkonen told a press conference in Brussels.
Moscow pointed to its European sales after some European countries criticized a deal allowing the United States to import Russian diesel.
The rebuke did not go down well in Washington, where the administration of U.S. President Donald Trump is seeking to bring down soaring fuel prices ahead of key midterm elections in November.
“The European Union paid Russia 250 Billion Dollars for Energy, and the Fake News Media doesn’t want to get near that story. I made the right choice for the American People – ALWAYS, AMERICA FIRST!,” Trump posted on Truth Social on Monday.
U.S. Treasury Secretary Scott Bessent on Sunday accused European nations of “hypocrisy,” as they “continue to finance Vladimir Putin” while criticizing the diesel agreement.
The European Union has taken significant steps to reduce its longstanding dependence on Russian pipeline gas and sap Moscow’s war chest since 2022.
Overall Russian gas imports, which represented 45% of the total in 2021, are down to 12%, Itkonen noted.
However, the bloc has increasingly turned to LNG shipped by sea, unloaded at ports, regasified and fed into the European network.
After the United States, which supplies about 60% of the EU’s LNG imports, Russia remains the bloc’s second-largest LNG supplier, accounting for around 17% of imports in 2026.
Several landlocked EU countries, including Slovakia and Hungary, also benefit from exemptions allowing them to purchase Russian oil transported via pipeline.
Swedish Foreign Minister Maria Malmer Stenergard pointed to the figure cited by Russia on Monday, lamenting it was higher than the 218.7 billion euros ($244 billion) the bloc has sent in support to Ukraine since the beginning of the war.
“We have imported a higher amount to the EU countries than we have given support to Ukraine,” Malmer Stenergard said. “If we would use the frozen assets, we would almost double the total support that we have given to Ukraine,” she added, referring to Russian sovereign funds held by the bloc.
“That would be a game-changer, and a game-changer is exactly what Ukraine needs.”
The International Monetary Fund (IMF) lowered on Tuesday its growth projection for the Turkish economy for this year, while keeping the outlook for the next year unchanged.
The IMF published its World Economic Outlook as part of the 2026 Annual Meetings of the IMF and the World Bank, held this week in Bangkok.
The fund said it expects Turkish gross domestic product (GDP) to grow 2.7%, down from 2.9% projection it shared in July. In 2027, the economy is expected to expand at 3.6%.
The fund also said it expects Türkiye’s annual consumer inflation at 31.2% in 2026 and 26.5% next year.
Türkiye’s annual inflation dropped below 30% for the first time in nearly five years as consumer price growth eased more than expected to 29.73% in September, according to official data.
For the global economy, the monetary body lifted the outlook by 0.1 percentage points to 3.1% this year. However, it cited disruptions caused by conflicts and the AI’s transformative role.
Business leaders and diplomats used a summit in Brussels on Tuesday to push for closer economic ties between Türkiye and the European Union, again calling for a modernized customs union, a place in the bloc’s industrial supply chains and a clearer accession perspective.
Belgium’s foreign minister also voiced support for updating the over 30-year-old trade agreement.
Speaking at the EU-Türkiye Business Summit, executives and officials argued that deeply integrated economies need a political and institutional framework that reflects their commercial reality.
Foreign Economic Relations (DEIK) President Nail Olpak quoted Jean Monnet’s line that Europe will be forged in crises and will be the sum of the solutions adopted for those crises.
“We are living in such a time. And I believe deeper integration with Türkiye is one of the answers Europe needs today,” Olpak said.
Priorities
He set out three priorities for the partnership.
The first is modernizing the customs union, which he said has been the backbone of economic ties for more than three decades but no longer meets current needs. “In a world that has changed this fast, we’re missing too many opportunities together,” said Olpak. An update would open up cooperation in services, e-commerce, public procurement and agriculture.
The second is recognizing Türkiye’s place in European industry. Olpak referred to the European Union’s proposed “Made in EU” rules, or how he reframed it, “Made with EU,” saying Türkiye has been part of the continent’s supply and value chains for over 30 years. Treating Turkish-made products as part of Europe’s industrial ecosystem “without new quotas or barriers,” he argued, is critical to Europe’s own resilience and competitiveness.
The third is connectivity. Citing the war in Ukraine and instability in the Middle East, he said the Middle Corridor, which links Europe with Central Asia via Türkiye and the South Caucasus, should remain a shared strategic priority. He also pointed to emerging north-south links connecting Europe and Türkiye with Iraq and the Gulf. He said geopolitical shocks “showed why we need reliable links for transport, energy and data.”
Tying the themes together, Olpak spoke of “competition on trust,” saying trust is built through performance rather than words and that Türkiye has proven itself a dependable partner through every crisis.
Türkiye’s European journey began more than 60 years ago, he noted, and full membership remains its goal. “After so many years, we need fresh momentum,” Olpak said.
Call for clear membership signal
Mehmet Ali Yalçındağ, coordinator chair of the DEIK Türkiye-EU Business Councils, said a “clear and credible reaffirmation” of Türkiye’s membership perspective would give the relationship direction, encourage reform and strengthen confidence in Europe’s ability to act with purpose.
He noted that the heads of DEIK’s 26 business councils with EU member states wrote earlier this year to the leaders of the European institutions, asking for renewed momentum in the accession process. He also welcomed European Commission President Ursula von der Leyen’s recent State of the Union address, which he said put competitiveness, security, affordable energy, AI and democratic resilience at the center.
Europe “will not become more competitive by excluding Türkiye from the economic space where our businesses already work together,” Yalçındağ said, adding that it grows stronger by building on its value chains rather than drawing new boundaries through them.
He urged both sides to move beyond arguments repeated for too long, saying caution has at times replaced initiative, to the benefit of competitors. Political dialogue, credible conditionality and practical cooperation can advance together, he said, without every disagreement being resolved first.
A clear commitment to Türkiye’s European future, he added, could help open the way to a modernized customs union, easier business mobility and visas, and closer cooperation on technology, energy, transport, defense and the green transition. He closed by urging both sides to act without adding “another ‘yes, but'” to a relationship already burdened by too many.
Industrial Accelerator Act in focus
“Türkiye and the EU need each other more than ever,” said Ambassador Yaprak Balkan, Türkiye’s permanent delegate to the EU, speaking at a summit session titled “Made in Europe or Made with Europe? The Industrial Accelerator Act Revisited.”
She said Türkiye shares the EU’s goals of building more resilient industry and speeding up decarbonization, but that neither side should weaken the value chains that make both more competitive.
Balkan said much of her team’s recent work has centered on the “Made in Europe” approach, which would prioritize European-made products in public procurement and subsidies under the proposed act, and that they have been working day and night to persuade partners with facts and scientific data.
Her central argument was legal. Decision 1/95 of the Association Council, which established the customs union, provides for removing duties and non-tariff barriers on industrial goods. If the act takes shape in the way Ankara fears, she said, it could contradict existing commitments.
Türkiye’s unique relationship with the EU through the customs union must be fully reflected in the legislation, Balkan said, and if it defines which partners are covered, Türkiye must be included from the outset. Where origin requirements are met, vehicles made in Türkiye should receive equivalent treatment.
Bilateral trade between Türkiye and the EU reached a record of about 207 billion euros last year. Automotive trade alone totaled 54 billion euros, roughly a quarter of the total, making Türkiye the third-largest export market for the EU automotive industry.
About 70% of vehicle production in Türkiye rests on direct or joint investments by major European manufacturers, Balkan said, and more than half of the parts and components in a car made there are imported from the EU.
She dismissed claims that third-country goods would enter the EU through Türkiye as an “urban myth,” saying Türkiye will not become a back door for circumventing the rules and that Turkish industry also suffers from unfair competition and overcapacity.
On public procurement, Balkan said a law passed in Türkiye in July contributes to the process toward an agreement with the EU, that Ankara wants negotiations to start as soon as possible, and that reciprocity will be ensured. She added that senior executives of European carmakers have themselves lobbied for Türkiye’s inclusion.
Future cooperation, she said, should focus on joint research, advanced manufacturing, cleaner materials, batteries, circularity and skills. “Inward-looking attitudes and protectionism cannot be the solution,” she said.
Belgium: Türkiye can help reduce Europe’s dependencies
Belgian Foreign Minister Maxime Prevot also addressed the summit, saying Türkiye has an important role in helping Europe reduce its strategic dependencies, particularly in key industrial sectors.
He said shifting global dynamics, the war in Ukraine and supply chain disruptions had made Europe increasingly aware of its economic vulnerabilities.
“Türkiye has an important role to play, not only as an industrial market but also as a gateway to markets in the wider region,” he said, stressing its manufacturing capacity, industrial expertise and links to neighboring markets.
European companies are increasingly seeking reliable partners closer to home as they reconsider where to manufacture and store their goods, Prevot said, and Europe should make the most of Türkiye’s proximity, especially in sectors where it needs to cut strategic dependencies.
He described Türkiye as a NATO ally, an EU candidate country and a major industrial economy connecting Europe, Asia and the Middle East, whose capabilities could make European supply chains more resilient. He called for stronger cooperation between Brussels and Ankara in economic security, defense, innovation, clean energy and digital technologies.
“Our economic relationship should no longer be limited to buying and selling goods. We should also be developing, producing, and investing together,” he said.
Prevot also backed modernizing the customs union, which he said has served both economies for around 30 years but needs to reflect changing global economic conditions.
Türkiye logged a current account surplus of $4.05 billion (TL 199.94 billion) in August, official data shared by the country’s central bank showed Tuesday.
Excluding gold and energy, the current account indicated a net surplus of $8.2 billion during the month, the Central Bank of the Republic of Türkiye (CBRT) said in its balance of payments data.
The surplus narrowed from $4.62 billion a year earlier as the goods deficit widened, while the services surplus increased.
The reading marked the second consecutive month in which the current account posted a surplus. Prior to that, the balance last posted a surplus in October 2025, when it stood at $477 million.
The country’s goods deficit reached nearly $3.75 billion in August, up from $2.8 billion a year earlier, the bank stated.
Meanwhile, the services surplus increased to $9.71 billion from $9.34 billion over the same period.
Travel revenues reached $7.28 billion, and transportation revenues reached $3.26 billion.
The primary income deficit edged down to $1.89 billion from $1.9 billion, while the secondary income deficit fell to $18 million from $21 million.
Direct investment saw a net inflow of $141 million in August, as nonresidents recorded a net inflow of $719 million.
Portfolio investment recorded a net outflow of $1 billion in August.
The country’s official reserves increased by $7.14 billion during the same period.
In the first eight months of 2026, Türkiye’s current account deficit widened to $31.5 billion from $19.67 billion in the corresponding period a year earlier.
The 12-month rolling deficit stood at $42.1 billion as of August, according to central bank data.
The International Monetary Fund (IMF) revised slightly upward its outlook for the world economy growth for this year, while also warning of growing risks from rising debt, including borrowing related to artificial intelligence.
The IMF says it expects the global economy to grow at a 3.1% pace this year.
That’s up from its July forecast for 3.0% growth and well below the 3.5% expansion in 2025. Growth in 2027 should rebound to 3.4%, it said in its latest Economic Outlook.
The report, released as world economic and financial leaders gather in Bangkok for the fall meetings of the IMF and World Bank, predicts that growth in the U.S. will remain steady at 2.3% in 2026 and 2027.
Collectively, advanced economies will grow 2.1% this year, up from 2.0% in 2025. But growth is forecast to slow to 1.9% next year, it said.
The forecasts are based on a nearly 41% increase in oil prices this year, at an average of $96 a barrel. Global inflation is foreseen at 4.7% in 2026 and falling to 4.1% next year.
They also are based on the assumption that shipments of oil and gas through the Strait of Hormuz will resume by March, and that the boom in AI demand will moderate.
The boom in artificial intelligence is offsetting damage from sharply higher prices for oil and gas, IMF economists say, but it also carries risks.
Its benefits are not shared equally: the U.S. and China account for more than three-quarters of net demand for imports of computer chips and other AI-related equipment, the report said.
“The outlook is highly uneven,” Silvana Tenreyro, the IMF’s director of research, told reporters in Bangkok.
Growth is increasingly concentrated, with 32 countries accounting for 95% of global growth, the report said. That compares with 54 countries as of April.
“The global economy is not simply slowing or accelerating; rather, growth is being reallocated across countries according to their exposure to the war-induced supply shock and AI-related demand strength,” it says.
Athanasios Vamvakidis, deputy director at the IMF’s Monetary and Capital Markets Department, said an AI-related correction in stock markets is just one of the risks. Rising bond yields are another evolving problem, along with cyberthreats that could disrupt financial systems, he said.
AI’s effects on employment are another key focus of the meetings in Bangkok, which IMF Managing Director Kristalina Georgieva described during an event Monday as “a slow moving tsunami, but a tsunami nonetheless.”
“The impact over time on jobs globally we estimate to be around 40% – jobs either augmented or downgraded or eliminated. And we are already seeing some of this impact,” she said.
Last week, the IMF chief urged countries both rich and poor to do a better job of improving their national finances, urging policymakers to do more to tame mounting levels of debt.
That’s especially true at a time of high borrowing costs, Tenreyro said.
Countries that are somewhat insulated from the energy shocks of the Iran war and that are benefiting from rapid adoption of AI are managing to keep growth on track.
Middle East contraction
But developing economies and emerging markets more vulnerable to higher costs for oil and gas will see growth slow to 3.7% this year from 4.5% in 2025, the report says. It forecasts they will regain momentum next year, expanding at a 4.4% annual pace.
The situation is much worse in the Middle East and Central Asia, where those regions’ economies are expected to contract this year before recovering to a 6.3% rate of growth in 2027.
The 21 European countries that share the euro currency are expected to grow by 1.1% this year and 1.2% in 2027.
China, the world’s No. 2 economy, is expected to expand 4.5% this year, down from 5% in 2025, in line with the government’s official target.
India is once again forecast to be the world’s fastest-growing major economy, advancing at a 7% clip, down from a sizzling 7.7% last year.
The IMF is a 191-nation lending organization that works to promote economic growth and financial stability and to reduce global poverty. At the meetings in Bangkok, finance ministers and central bank governors will assess the state of the world economy and discuss strategies to support financial stability and sustained growth.
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