Tariffs, immigration crackdown, funding cuts: BU professor warns of ‘Trump Trifecta’

We’ve been hearing a lot about the broader national economic effects of President Trump’s policies, like tariffs, immigration crackdowns and cuts to federal funding. Massachusetts is home to an economy built on innovation, research and global talent — which also means it could stand to lose the most.

Mark Williams, professor at Boston University’s Questrom School of Business, joined GBH’s All Things Considered host Arun Rath to share his research on how Massachusetts could be disproportionately harmed by the “Trump trifecta” — tariff hikes, NIH funding cuts, and his crackdown on immigration. What follows is a lightly edited transcript.

Arun Rath: Let’s break down the trifecta, starting with the crackdown on immigration. We’ve seen dramatic images of people being pulled off the streets in Massachusetts, but what does it mean in terms of economic impact on the state? How does that hurt us?

Mark Williams: Immigration itself is so vital to the state of Massachusetts. In the U.S., about 15% of the population is an immigrant, but in Massachusetts, we’re at 20%. Our workforce alone is 23%, and when you include all the foreign-born entrepreneurs, we’re at 25% of Massachusetts’ population.

If we were to lose immigrants — in particular, first-generation immigrants — in our workforce, that’s going to actually push job shortages, and that’s going to create more economic stress for the economy here.

Rath: Talk a bit more about that specifically — what a big part of the Massachusetts economy [immigration] is and what you found in your research.

Williams: It’s fascinating. In regards to immigration, a lot of folks don’t realize, but as foreign-born residents go as a percentage of our population, we’re in the top five within the country. We’re ahead of Texas.

We have traditionally relied on immigrants and the flow of immigrants that come in, not only for the lower-skilled jobs, but also for the higher-skilled jobs that you referred to earlier. About 29% of foreign-born immigrants who come to Boston in particular, and Massachusetts in general, work in life sciences or STEM-related jobs.

Rath: When it comes to tariffs and Massachusetts disproportionately being hit, that was one [area] where, before I read your work, I wouldn’t quite have expected that. But it turns out there is more international trade coming through Massachusetts than I realized. Can you talk about that?

Williams: Massachusetts has had a long history of maritime trade. About 9% of our state GDP is tied up with the buying and selling of goods, in particular. Our three largest trading partners are Canada, China and Mexico, and these, of course, are the three countries that are being hit the hardest with tariffs. Now, as a state, we actually sell more products than we buy. As a result of that, we’re going to be hit dramatically if these tariffs stay in place for a long period of time.

There are lots of examples of products that we sell: medical devices, high-tech instruments, and we also import things like gas and diesel, and we’re a big importer of electricity. It could cost an increase of $100 to $200 million to the state of Massachusetts’ residents for electricity now due to these tariffs that are being placed on Canada.

Rath: The third part of the trifecta, the funding cuts — talk about how that would affect the Massachusetts economy.

Williams: When we look at the 10 biggest employers in Massachusetts, eight of the 10 are impacted directly by NIH cuts. As those cuts go into play, then funding isn’t available, jobs are cut, and these biggest employers of Massachusetts have a direct impact on the state.

I’ll give you an example. Mass General Hospital is one of the largest employers in the state. UMass, Harvard, MIT, Boston University, Beth Israel, Partners Health — many of these institutions that we rely on to actually help build and grow the Massachusetts economy are directly impacted by NIH funding cuts.

[The new policies also affect] tourism and many other aspects that get hit directly as a result of a weaker economy.

Rath: The ripple effects?

Williams: Right. So, not only do we have the trifecta where we have policies that are impacting tariffs or NIH funding cuts, which are costing Massachusetts — and also, immigration crackdowns, which are costing Massachusetts — but we also have the second-order or ripple effects. We’re seeing those, actually, in four different areas.

There’s a good chance that we’re going to have new federal cuts, specifically in areas such as Medicaid. Right now, in Massachusetts, about $26 billion per year in federal funding — that’s about 36% of the state’s revenue — is reliant on federal funding. If Medicaid is cut, and we receive $12 billion a year, even a 4% cut would represent roughly $1 billion. So that’s an example of a ripple effect of these policies.

The other is tourism. We, in Massachusetts, invite roughly 52 million people per year to come in. [Tourists] spend roughly $24 billion per year within Massachusetts. Tourism itself, foreign visitors, are going to be reduced dramatically. We have 2.1 million foreign visitors per year that we welcome. With immigration policies, stricter crackdowns, and a view that maybe you’re not welcome in the U.S., it will reduce our tourism and cut many jobs within the Massachusetts economy.

International student enrollment is also going to be hit dramatically, and that’s going to impact many universities within the Massachusetts environment. We’re the third-largest state in regard to international students. Eighty-two thousand students come to Massachusetts each year and spend roughly $3.9 billion, supporting 36,000 jobs. Even a 10% hit of those international student enrollments would produce anywhere up to a billion-dollar annual hit for Massachusetts colleges and universities.

And finally, if that wasn’t enough, if the long-term economy within Massachusetts is damaged, then we should expect to see our bond rating — which is a sterling bond rating at the state level — in the city of Boston also be downgraded, which could cost multi-millions of dollars per year, and the higher funding costs, of course, fall directly to the taxpayers.

Rath: Mark, this is all staggering, frankly, to think about the amount of money and percentages you’re talking about. I don’t know if you can answer this question, but if you could bundle it all up, tell us how much hurt this ultimately means for Massachusetts in terms of our GDP and our quality of life.

Williams: What’s important to understand is that when GDP declines — and that’s, of course, an economic health barometer of any economy — then the health of that economy and the standard of living of those who live within that economy in the state of Massachusetts also decline. That’s why it’s very important to have a stable and growing economy.

So this economic hit itself, even on the tariff side, could reduce GDP by over $12 billion, and that would cut about 77,000 jobs, just on the tariff side. If we were to add in NIH funding cuts, we can expect to see another hit of $2.2 billion. This is just in 2026. And then, another hit as a result of immigration crackdowns of $3.7 billion.

In essence, when we think about and add all these together, it is significant. It’s to the point where the state itself needs to actually rise up and develop a very comprehensive strategy of how to respond and protect the state. This is an economic attack on the state of Massachusetts.