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With a simple stroke of a pen, President Donald Trump’s executive order suspending the entry of all refugees for citizens of seven Muslim-majority countries into the United States for 120 has officially began on Friday afternoon. These countries listed are; Syria, Iraq, Iran, Libya, Somalia, Sudan and Yemen. The White House describes this rigorous decision as a prevention towards terror attacks on US ground with an immediate action before it becomes too late. That said, protests have erupted nationwide over the immigration ban. People who were planning to travel right after the ban, were not allowed to board their planes or pass through the customs to enter the United States which caused confusion and extreme panic. Although, when D. Trump has mentioned the 9/11 occasion, it brought up this question in mind: ‘’The 19 plane hijackers were from Saudi Arabia, Lebanon, Egypt and Saudi Arabia; which are in fact not included on the ban list…
What sort of impact will this have on the U.S. economy?
The immigration ban, even if momentary, would doubtlessly have serious national security and political consquences; including counter-terrorism efforts. On the other hand, the US economy will also be effected negatively; especially in tourism, travel and education. Tourism and Travel being the second largest source of income in the U.S. Economy.
In 2015, 77.5 million international visitors whom travelled to the U.S., spent over $246.2 billion on U.S. good and services; 11% of the total U.S. exports according to the Department of Commerce. In addition, those international visitors have supported 1.1 million American jobs;14% of total travel and tourism-related jobs. So; D. Trump’s order to restrict people from entering the United States would further have negative impact on the economies of associations reliant on tourism, moving on to federal, state and local budgets through decreased tax revenues. Depending on the reactions of other countries, it could still have broader repercussion for travel, trade as well as investment in the United States.
An estimation of $14 billion to $30 billion of loss is expected as an aftermath of Muslim travel ban per annum. Furthermore, the loss of jobs can rise up to 50,600 to 132,000.
There are millions of students from those banned countries studying and planning to study in the United States. With this ban, it is estimated of a loss of spending on education to be about 15% of the total foreign student spending; in other words $4.6 billion.
So what happened to the U.S. dollar after the Immigration ban?
The U.S. dollar dropped against JPY, EUR in Asia-Pacific trading on Monday as expected. The Investors guarded themselves after uncertainty of the level of impact which the immigration ban might have; including the data showing the U.S. economy slowing down more than expected in the fourth quarter. Moreover, after stirring a session low of 100.17; the U.S. dollar index dipped about 0.2% to 100.34 in Asian trade.
So; there are few things to follow up this week; the U.S. inflation data, manufacturing data, FED’s meetings outcome, the non-farm payrolls figure, the Bank of Japan’s policy meeting and perhaps Trump taking new measures after a global backlash.
