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Donald Trump cries “invasion” to justify an immigration crackdown

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AN “INVASION”. On the campaign trail, that’s how Donald Trump described the millions of migrant encounters at the southern border during Joe Biden’s presidency. During his inaugural address the 45th, and now 47th, president echoed the same sentiment, but this time with a note of triumphalism. “For American citizens, January 20th, 2025 is Liberation Day,” he crowed.

The notion that America is being invaded has become the defining theme of Mr Trump’s immigration policy. Hours after his inauguration the president issued ten executive orders on immigration and border enforcement “to repel the disastrous invasion of our country”. This is despite the fact that encounters at the border are the lowest they have been in four years, thanks to increased enforcement by Mexico and asylum restrictions implemented last year. The executive actions generally fall into three categories: the rescission of Mr Biden’s policies and reinstatement of Mr Trump’s first term plans, flashy things meant to project toughness, and more extreme measures that range from probably illegal to flagrantly unconstitutional.

In the first group Mr Trump issued a sweeping order modelled on one from his first term that aims to increase detention, force countries to take back their citizens, enlist local police to help with immigration enforcement and punish sanctuary cities by withholding federal funds, among other things. He intends to bring back Remain in Mexico, a policy introduced in 2019 that forced migrants to wait on the other side of the border while their asylum claims were adjudicated. But because Claudia Sheinbaum, Mexico’s president, has to agree to that—and she has already registered her opposition—the order is more of a signal of intent than an immediate policy change. Mr Trump promised during the campaign to shut down CBP One, a government app set up by the Biden administration that allowed migrants to schedule an appointment to apply for asylum. Migrants waiting for those appointments on the Mexican side of the border found their meetings abruptly cancelled as soon as Mr Trump took the Oath of Office.

During his first term, the number of refugees relocated to America plummeted. This time he has completely suspended all refugee resettlement for at least four months. According to Reuters, soon after Mr Trump was inaugurated nearly 1,700 Afghans who were cleared to be resettled in America had their flights cancelled. Another order increases vetting for migrants and directs agencies to identify countries from which travel should be banned, something that will sound eerily familiar to those who remember the travel ban Mr Trump implemented on mostly Muslim-majority countries almost exactly eight years ago.

Next consider the policies that sound tough but may not change very much. The same order that discontinued CBP One also demands physical border barriers, detention and deportation. That is “just calling for enforcing laws that are already on the books”, says Julia Gelatt of the Migration Policy Institute, a think-tank. Additionally, Mr Trump declared a national emergency at the southern border, which allows the secretary of defence to send troops to help secure the frontier with Mexico. This is hardly unprecedented. George W. Bush (Operation Jump Start) and Barack Obama (Operation Phalanx) did something similar. Federal law limits soldiers’ roles in domestic affairs to non-law enforcement activities such as transportation and logistical support, rather than actually arresting migrants. Mr Trump’s order suggests that he doesn’t plan to cross that line. The national emergency also unlocks construction funds from the Department of Defence for the fortification of the border wall, a move the president also made in 2019.

That leaves the most extreme orders. The new president kickstarted the lengthy process of classifying drug cartels as foreign terrorist organisations by arguing that they “threaten the safety of the American people, the security of the United States, and the stability of the international order in the Western Hemisphere”. Some Republicans have wanted that for more than a decade. The worrisome bit of that order directs top officials to prepare for the possibility that Mr Trump will invoke the Alien Enemies Act. This law is the only piece of the Alien and Sedition Acts, passed in 1798 when America was feuding with France, that was not repealed or allowed to lapse. It permits the president to summarily detain and deport citizens of countries with whom America is at war. It was last invoked to detain Germans, Italians and Japanese during the second world war—hardly a proud moment in American history. Yet America is not at war, and drug gangs are not sovereign nations, even if they do control some territory.

This is where Mr Trump’s talk of an “invasion” becomes more than rhetorical bombast. Framing the cartels as terrorist organisations invading America is meant to legitimise his use of the law—though it is doubtful the courts will see it that way. And because America is being invaded, Mr Trump argues, he can block anyone from crossing the border, in effect suspending asylum until he decides that the invasion is over.

Mr Trump also decided that the meaning of the 14th Amendment to the constitution, which says that “all persons born or naturalised in the United States, and subject to the jurisdiction thereof, are citizens of the United States”, is up for debate. He declared that from next month, children born to parents who are neither citizens nor permanent residents would be denied passports. The order applies not only to the children of unauthorised immigrants but also to those of people living in America on work or student visas. To justify this, Mr Trump argues that all foreigners are not in fact “subject to the jurisdiction” of its government. Since the passage of the Indian Citizenship Act in 1924, which gave citizenship to Native Americans belonging to sovereign tribes, only foreign diplomats have been considered immune from American law under that clause.

This executive order seems extremely unlikely to survive in the courts. But it could be intensely disruptive for new parents in the meantime. If implemented, in effect American-born children will become illegal “immigrants” on exit from the womb. American birth certificates do not include information on the citizenship of parents, and so it is unclear exactly how Mr Trump expects officials to gather the information necessary to refuse passports. Still, it is exactly what the president promised he would do.

Economics

Germany’s election will usher in new leadership — but might not change its economy

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Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

Change in German government will deliver economic success, says CEO of German employers association

Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.  

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.

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