Trump’s quagmire – Now what do we do?

The quagmire effect – Quo Vadis?

Policy Watch
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Nothing resembles a quagmire more than the state of the US post President Trump’s pronouncements on immigration, and high tariffs. He thinks he could be bringing glory back to the US in much the same way William McKinley did as the 26^th president of the US. Trump could be horribly wrong.

To understand this better, it is worth listening to the remarks of Taimur Baig, managing director and chief economist at DBS Bank. He made these remarks at the Asia Society discussion on “The Evolution of American Imperial Power” at Timeline 16:19 at

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He points out how Tump’s altar ego is McKinley who served as the US president from 1897 until his assassination in 1901. One of Trump’s first executive orders was to rename Mount Denali to Mount McKinley (https://www.princesslodges.com/trip-planner/parks-destinations/whats-in-a-name/).

McKinley created a wall of import tariffs to protect the US sugar industry. Yet he surprised most economists by still managing to have a robust economy. But this was possible because of two other factors. The US witnessed one of the largest waves of immigration – of the Irish and Italians – which expanded the market for talent, hence productivity. Moreover, he was fortunate to have the gold rush which allowed for monetary easing, without stoking inflation.

Today, points out Baig, high tariffs, tax cuts and immigration brakes will cause a huge economic crisis. Add to this the huge debt burden and the rising deficits the US faces (Free subscription -- https://bhaskarr.substack.com/p/america-weeps-trump-leaves-it-isolated) and you could have a crisis. Trump may be seeking to rekindle the right idea at the wrong time. Expect trouble ahead. It is clearly a case of McKinsely misunderstood (https://www.epw.in/journal/2025/5/strategic-affairs/mckinley-musk.html).

Then there are three other reasons why Trump’s moves are terribly saddening.

First, it is ironic that the land of immigrants should now be against migrants.

Second, because almost one fifth of the US work force comprises migrants. Can the US downsize its workforce and make do with the remaining 80% who have been taught not to wor. The last is a direct result of two factors. First, deindustrialisation – which in turn was a direct result of offshoring. Second, freebies, helicopter money and cheques by mail, which too have persuaded many people not to work. Can this be done, without causing labour inflation? Can this be done without a reduction in national output?

Third, when it comes to migration, one is also confronted with the refugee problem. Trump wants to resettle all the Gazans in a third country – be believes that Egypt and Jordan would take in the refugees. Both Islamic states have given a categoric “No” to the Trump proposals and have been backed by all the Islamic states in the Middle East. The problem is that since all the refugees – right from Iraq, Libya, Lebanon, Syria and now Gaza -- are a direct result of US policies, shouldn’t the US itself take in the refugees first. The US has embarked on a dangerous policy of action without responsibility. It has put itself in the line of direct fire by the international courts, because it has not only been an abettor of genocide and ethnic cleansing. It has now stepped into the role of a direct participant – since Trump now wants to resettle Gazans.

Things could get more complicated because Russia too has come in openly in support of the Gazans

.The situation is truly messy.

Smoke and mirrors

The US doublespeak on immigrants is an old story. It conceals a distaste for migrants – not far from the same sentiment that drives ethnic cleansing.

The US has always been in favour of wiping out people that did not fit into what the US considered as “our people”. It drove out the Mexicans from what is now Silicon Valley. It almost wiped out the entire population of Red Indians, the original inhabitants of that land. It has wrinkled up its nose at the mention of Latinos. It is not comfortable with the idea of Indians occupying key positions in the US, but also knows that it cannot do without them. Unfortunately, for white skinned racist Americans, Indians today are the richest ethnic community in that country.

The repugnance for Indians is nevertheless evident. Consider the way Indian illegal migrants were returned with handcuffs and shackles. It is truly sad that the Indian government did not protest for the dignity of Indians the way Columbia did. The latter refused to let the US plan land in its territory till the US agreed to deport them but without handcuffs. India was willing to sacrifice the dignity of Indians.

Trump merely advertised an old practice

Another irony is that deporting immigrants was not really a Trump strategy. Immigrants have been deported in large numbers earlier as well. But they were not handcuffed and shackled. What is peculiar for Trump, therefore, is his willingness to humiliate and debase people. Not a pleasant thought for anyone trying to create a new world order.

A very expensive proposition

Equally worrying is the US disdain for the costs involved in deporting illegal migrants. Its failure to work out a policy where their skills could be used for a period of time in exchange for voluntary migration would have been a sensible alternative. This comes at a time when the US is already confronted with deficits and a mind-mindboggling debt burden (Free subscription -- https://bhaskarr.substack.com/p/the-us-dollar-under-siege). Expect the US citizen to groan under the weight of both inflation and taxes – never mind what Trump may say about MAGA. So, the deportations will cause a labour cost inflation, a drop in productivity, and a goods inflation as well because of the high tariffs that Trump has sought to impose.

And as a Bloomberg report points out, (https://www.bloomberg.com/news/articles/2025-02-07/immigration-drove-record-jump-in-us-labor-force-ahead-of-trump) , the US labor force grew by 2.2 million people last month, the most in data from the Bureau of Labor Statistics going back to 1948, and most of that came from foreign-born workers. Immigrants were also a key driver of job growth in 2024. The number of employed foreign-born workers grew by 1.9 million in the year through January, compared to a gain of 766,000 for the native-born population. “The surge in net immigration was a key factor boosting US labor supply in the last couple of years, in turn alleviating the labor shortages that were so prevalent in 2022,” said Brian Coulton, chief economist at Fitch Ratings. The US is just about to get into the quagmire. It could drag others down.

What will all this mean for the US? As Baig of DBS bank put it quite succinctly, “the gravity of economics” could bring Trump down.

The author is a senior journalist and researcher

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