The immigration policies of the Trump administration may have some unexpected consequences in an era when Baby Boomers are leaving the workforce. Couple that with the AI boom, and we may be in for decades of lower productivity and a declining workforce.

 

Illegal immigration has already fallen by over 80 percent since Trump took office, while legal asylum seekers entering the U.S. has dropped by 99.9 percent, according to the Cato Institute. The reduction in legal immigrant entry have also been effective and are 2.5 times lower than illegal entries.

 

Last week the Republican House passed an additional $70 billion in spending for an immigration crackdown bill. They passed their bill by 2 votes. Now the legislation moved on to the Senate. The money will fund immigration enforcement. Clearly, the war on immigration continues.

 

In retrospect, today's anti-immigration policies collides with one of the enduring American myths; that of the "melting pot." It was a cornerstone of American identity for decades. Without immigrants, so the story goes, there would be no United States. In one sense that is true, since the only inhabitants of North America in the time of the colonies were native Americans.

 

Although America's population makes up about 4 percent of the world's total, it accounts for 17 percent of all international migrants. As of 2023, more than 47.8 million immigrants lived in the U.S. That was the largest absolute number in the nation's history. This foreign-born population accounted for 14.3 percent of the total population, almost as high as its 1890 peak of 14.8 percent. Historically, when immigration numbers have reached this level, there has been a backlash in attitudes towards immigrants.

 

In past columns, I have delved into America's love/hate relationship with immigrants. As early as 1751, Benjamin Franklin worried about the number of Germans "swarming" into the colony of Pennsylvania. Suffice it to say that in the most recent presidential election, the majority of voters approved of Donald Trump's anti-immigration rhetoric.

 

One result of these efforts has been a steep decline in U.S. population growth. One of the steepest in many years. Why does that matter? For one thing, lower population growth equates to a smaller workforce over time. The Congressional Budget Office had projected that higher-than-expected immigration levels between 2024 and 2034 would have increased U.S. GDP by an estimated $7 trillion to $8.9 trillion.

 

Their analysis, along with that of many economists, argues that immigration was vital to economic growth. It does so by expanding the labor force and boosting consumer demand. Today, as the number of new immigrants decline precipitously that rosy view of economic growth and productivity is no longer a sure thing.

 

The analysts at the Federal Reserve Bank closely monitor employment, since full employment is one of its most important objectives. This year, they found that the monthly job gains required to keep unemployment steady (the breakeven rate) have now dwindled to near zero. Few economists expected to see the results of this drop off crop up so soon in the monthly employment figures. The immigration slowdown seems to be having an outsized impact on labor force growth.

 

Normally, a decline in job growth would signal an economic slowdown, but not this time. Employment growth has been anemic, and yet GDP growth has forged ahead. The combination of lower immigration, retiring Baby Boomers, and the advent of labor-saving AI is impacting job growth but not GDP growth, or at least not yet.

 

As for the labor market overall and its impact on the economy, both the retiring Baby Boomer workforce and declining immigration do not bode well for productivity growth. There is a hope that artificial intelligence will reverse the hit to productivity, but others argue that it will only do so at the expense of labor.

 

In my next column, I will expand on the benefits of immigration and exactly how the lack of it can hurt U.S. productivity.

 

The U.S.-Mexico-Canada Agreement (USMCA) is up for review on July 1, 2026. If all three countries agree, the present deal could be extended for another 16 years. If not, the agreement can continue or not.

 

The amount of trade involved is significant. Last year, because of the agreement, Mexico became the U.S.'s top trading partner, with total bilateral trade totaling $873 billion (15.6 percent of all goods exported and imported by the U.S.). Canada comes in second place with $719 billion worth of trade (12.8 percent of goods).

 

Both countries have surpassed China, which fell to third place. Both countries are America's largest sources of imports and account for one-third of U.S. goods exports. The USMCA is the world's most integrated manufacturing bloc.

 

Old timers may remember the North American Free Trade Agreement, which went into effect on Jan. 1, 1994. Prior to that, Canada and the U.S. had hammered out a free trade agreement in 1988. Things appeared to be going quite well until Donald Trump hit the scene. During the 2016 presidential campaign, Trump blamed NAFTA for the country's trade deficit with Mexico and for the loss of American jobs.

 

As was his way, Trump demanded NAFTA be renegotiated, or he would walk away from the pact. Negotiation began in August 2017 and took more than a year before all parties agreed to a deal. It was less an overhaul of NAFTA than a modest adjustment despite the president's demands and later claims. The name was changed to the United States-Mexico-Canada Agreement and was ratified on July 1, 2020.

 

The required review of the pact was expected to be a formality and, at worst, a technical review, but nothing that has to do with trade under Trump's second term is anything but. This time, it is Canada, not Mexico, that is at loggerheads with American officials. Readers may recall that when Trump launched his global trade war last year, many economists had predicted enormous damage.

 

It didn't happen for one important reason — USMCA. Much of American trade is protected under the trade pact. Autos, natural gas, crude oil, lumber, and much of the manufacturing base were sheltered thanks to the extended supply chains that encompass North America. This pipeline of goods required time, effort, and enormous investments that required decades to build.

 

Trump's tariff wars have ignited deep tensions between all three countries. Trump has blamed America's fentanyl addiction on both countries. Tariffs on both trading partners on steel, aluminum, autos, lumber, and more have been met by retaliation. Prime Minister Mark Carney has said these tariffs violate their trade agreement. Canadian provinces agree. As a result, they have banned U.S. wine and liquor imports. Canadians, in general, are more than irritated with Trump's policies and trashing of their country in comments and on social media. Many have crossed off the U.S. for vacation rentals and second homes as a result.

 

A major sticking point is the back-door policies of China and other foreign countries to use both Mexico and Canada to avoid tariffs by funneling goods into the North American market under the free trade agreement. That does not sit well with Canada, which has recently established new trade agreements with China.

 

Recently, United Auto Workers' President Shawn Fain spoke out against the renewal of USMCA unless big changes were negotiated. The head of the 400,000-member union, like Trump before him, blames the trade agreement and NAFTA before it for the loss of millions of American auto manufacturing jobs.

 

He wants to set a North American minimum wage that would guarantee Mexican auto workers would receive equal pay with their American counterparts. He would also like to see tougher penalties for violations of workers' rights and quotas requiring more vehicles to be manufactured in the countries where they are sold.

 

Fain is one of the few voices in the auto industry that supports higher tariffs on autos. In reply, auto company executives argue that Fain's recommendations would only increase car prices at a time when few Americans can afford them, while destroying a supply chain system that took decades to build.

 

Negotiations on the pact have thus far only included Mexico. The UAW's recent stance may complicate negotiations with Mexican officials. As for Canada, Carney has told U.S. officials that Canada is not interested in making further concessions to join the discussions. However, this week, Dominic LeBlanc, Canada's Minister of Trade, and Janice Charette, the country's chief trade negotiator, met with U.S. Trade Representative Jamieson Greer.

 

Canada presented specific, detailed trade proposals, though the meeting did not mark the start of formal negotiations. LeBlanc admitted that "This trip has not been without some turbulence." The delay in starting discussions, with a deadline less than a month away, led some to believe that there is a possibility that two separate trade agreements may be required, one for the south and another for the north.

 

Foreign car companies have threatened to pull their cheapest models out of the U.S. market if the three-country trade deal isn't renewed or if it is renegotiated along the lines of the UAW's wishes. Nissan, Hyundai, and Toyota are part of only a handful of car manufacturers offering small, more affordable cars for U.S. consumers.

 

Given what is at stake, the odds of the trade pact surviving July are high. Looking at past treaties, negotiations always took longer than the allotted time before a deal was struck. In this case, if no agreement is reached by the deadline, the deal continues under Article 34.7 of the USMCA but shifts to annual reviews rather than the 16-year period ending in 2042. If that were the case, investment in supply chains, the broadening of cooperation to include areas such as digital trade, IP, and regulatory cooperation would likely erode due to the uncertainty involved in annual reviews versus a 16-year time horizon.

 

A year ago, Colossal Biosciences introduced to the world their version of the dire wolf, an animal extinct for over 12,500 years. The company's scientists are hoping to bring back the woolly mammoth by 2028. On the list for resurrection are the blueback, extinct for two centuries, the giant moa, and the beloved dodo, among others.

 

Before you ask, Velociraptors, the highly intelligent, deadly predators of "Jurassic Park," are not on the list of extinct species being studied, nor are any other dinosaurs. The company is headquartered in Dallas, Texas (not Isla Nublar). It was co-founded in 2021 by CEO Ben Lamm and Harvard University geneticist George Church, with initial support from venture capitalists totaling $15 million.

 

Since then, Lamm, who originally made his money in gaming and AI startups, has used his Silicon Valley know-how and entrepreneurial drive to raise more than $10 billion in funding. While the company remains private, some of its notable investors now include Paris Hilton, filmmaker Peter Jackson, and NFL quarterback Tom Brady.

 

The world has already bestowed a name on Colossal Bioscience's ambitions — De-extinction. De-extinction is the process of reviving extinct species using advanced scientific techniques. It is a growing field that represents the meeting point of several scientific pursuits, including biotechnology (the use of living systems or organisms to develop products), ancient genomics (the study of DNA from extinct organisms), cloning (creating genetically identical organisms), and genome editing (precisely altering the genetic material of an organism).

 

The idea of de-extinction was first popularized back in 1979 by the Piers Anthony book "The Source of Magic" and Michael Crichton's 1990 sci-fi novel "Jurassic Park." The authors raised the possibility back then that long-extinct organisms could be cloned from preserved DNA.

 

Fast forward to 2024, when company scientists worked secretly for months in their Dallas labs growing grey wolf blood cells and extracting DNA from them. They made 20 edits in the animals' genomes — changing specific DNA sequences — and injected the altered DNA into egg cells from a domestic dog to create clones. These cloned embryos were placed into the wombs of surrogate dogs, eventually resulting in the birth of three pups. In April of that year, the company announced that "the first de-extinct animals are here."

 

The pups were described as dire wolves, a large-bodied wolf species of the North American Ice Age, 11,500 years ago. You may remember the Stark kids' dire wolves from "Game of Thrones." The two males, Romulus and Remus, were born in October 2024, while the female, Khaleesi, was born in January.

 

The news triggered a worldwide media sensation but also sparked an ongoing battle between the company's team and other scientists over exactly what constitutes a de-extinction event.

 

Some scientists argue that the company's dire wolves are not authentic but are simply genetically engineered dogs with wolf-like characteristics. They worried the hype around the company's work on extinct species is exaggerated and can mislead the public about what de-extinction can achieve.

 

Taking their lead from Jeff Goldblum's Dr. Ian Malcolm, the chaos theorist who warned the Jurassic scientists about the dangers of dinosaurs, other critics fret about the ecological risks of letting loose in the wild predators like these new dire wolves, or the damage giant woolly mammals may do roaming the countryside.

 

Colossal Bioscience frames its work as part of the global effort to reverse biodiversity loss. The company and its shareholders believe in conservation; though modern conservation efforts, they add, are being outpaced by climate change and the rapid eradication of species after species. At the same time, many of the dwindling populations of endangered species have become dangerously inbred. By introducing lost genes from museum specimens, Colossal Bioscience hopes to reintroduce genetic diversity.

 

In May, the company announced it had cloned four critically endangered red wolves. This species is on the brink of extinction. The red wolf once roamed the Eastern and Southern U.S. By the 1970s, systematic hunting and habitat loss reduced their numbers to fewer than 20. The company's long-term goal is to reintroduce red wolves into the ecosystem with the help and guidance of government agencies.

 

Worldwide, the United Arab Emirates has funded a research lab at the Museum of the Future in Dubai. An accompanying biovault — a secure facility designed to safely preserve genetic material — will store a wide range of DNA from many species for preservation and de-extinction. The UAE is also interested in saving the Arabian leopard, the smallest and rarest of big cats, which is locally extinct.

 

In New Zealand, $100 million was raised to launch the giant moa project. The flightless bird, extinct for several hundred years, is the country's national symbol. "Lord of the Rings" director Peter Jackson, as well as M?ori groups and scientists, are backing Colossal Bioscience's efforts on that project.

 

The bottom line, for me, is this: Anything or anyone that captures people's interest and imagination in conservation is vital. Do I care if this dire wolf, woolly mammoth, Tasmanian tiger, dodo, or Moa is an exact replica of an extinct species? Not at all — nor will it matter to kids, adults, my readers, or the world at large. If it excites us or convinces us to join efforts to preserve and reverse threats to our ecosystem, I am all for it. Are you?

 

There is a brave new world out there for crypto miners, brokers, and blockchain entities. The same process that allows cryptocurrencies to trade and settle in the blink of an eye is now being applied to other assets. The hope is that this new technology can help some companies escape another long, crypto winter.

 

It is called asset tokenization. And whether we are talking about stocks, bonds, real estate, or anything else that trades in the real or digital world, all these areas can be tokenized. The first question many ask is what is a digital token?

 

It is a programmable digital asset, just like any crypto currency, issued on an existing blockchain such as Ethereum. But unlike cryptocurrencies such as Bitcoin, which have their own blockchain, tokens can be issued on just about anything, including asset ownership of things (paintings, properties, dollars), access rights, voting power, identity, predictions etc.

 

A stock, for example, which trades on a digital market (and most of them do), can now be converted into a digital token on a blockchain. This allows for fractional ownership, faster transactions, and broader market access. While tokens can be applied to anything, they have an obvious use in expanding financial infrastructure where settlement of money is extremely important.

 

One way to think about this technological trend is as a new way to handle the flow of financial assets that trade globally, 24 hours a day. Money changes hands constantly and the expression ‘time is money' takes on real meaning when trillions of dollars are involved. Tokens act as a new kind of plumbing that allows money, instead of water, to flow faster, with fewer cracks, leaks or clogs, and therefore greater predictability. In past columns, I have written about stablecoins, which also use blockchain technology to effect fast, secure, and borderless transactions in the currency world. This is simply another use for this technology.

 

Crypto companies have embraced digital tokenization with open arms. Bullish, a crypto exchange run by the former head of the New York Stock Exchange, acquired a tokenized equity company, Equiniti, for $4.25 billion in a stock transaction a week ago. Recently, Centrifuge, which specializes in tokenizing exchange-traded funds and credit products, announced a deal with Coinbase, a leading cryptocurrency company.

 

Robinhood, the broker, is also interested in the area but has yet to ink a deal. CEO Vlad Tenev did say that "our strategy is to take crypto infrastructure and apply it to assets that have real-world utility. That's why we care so much about tokenization."

 

Crypto companies hope tokenization will allow them to expand beyond simple cryptocurrency trading. As readers know, crypto currencies can be notoriously volatile and have been subject to periods of massive underperformance. Over the years, the crypto companies have had to weather periodic "crypto winters," which can last for years. If tokenization catches on, it could allow the industry to diversify away from volatile crypto trading toward a more stable and predictable business model.

 

But tokenization is in its infancy. As it stands, there are only about $27 billion in tokenized real-world assets on the blockchain. That's a drop in the bucket when one considers the $200 trillion plus in global digital equities alone.

 

However, the settlement arms of Nasdaq and the Depository Trust and Clearing Corp. (DTCC), which do the lion's share of equity settlements, are now engaged in pilot programs studying both blockchain-based settlement and tokenized securities. Larry Fink, the CEO of BlackRock, the mega-billion-dollar asset management company, believes tokenization could transform finance. He may be right. One thing is for certain: blockchain technology is here to stay, and its uses will continue to multiply.

 

In his State of the Union speech in February, the president floated the idea of a new retirement savings vehicle for lower-income Americans without workplace plans. Last week, the president signed an executive order making good on his promise.

 

His executive order aims to establish an annual $1,000 match for individuals earning less than $35,000 per year who contribute to an Individual Retirement Account (IRA). The only caveat is that they cannot have an employer-sponsored 401(K) type plan at their job.

 

Say what you will, Donald Trump is trying to do something about Americans' subpar retirement savings rate. He knows (as we all do) that Social Security is in trouble and probably won’t be around for much longer. This new effort follows another incentive called the Trump Accounts, which are new custodial-style traditional IRAs for kids.

 

This new executive action will launch a website called TrumpIRA.gov, where workers can research, compare, and enroll in private-sector retirement plans. The hope is that the website will serve as a conduit between workers and plan sponsors, with the government acting as the broker.

 

More than 56 million Americans lack access to an employer-sponsored retirement plan at their place of employment, according to research by the Pew Charitable Trusts, an independent public policy nonprofit organization. And yet, nothing prevents any American worker from setting up an IRA and making tax-deductible contributions right now. So why don’t they do it?

 

Many workers say they cannot save for retirement, especially as inflation reduces their paychecks. Others find the application process too complicated or paperwork heavy. Some do not bother because they already have employer retirement plans. For many, retirement seems unreachable due to their background and income.

 

In 2015, Barack Obama launched a $70 million program allowing workers to make automatic payroll contributions to a government-backed retirement account. It closed 17 months later, after only 30,000 workers enrolled and contributed $34 million. It hasn't improved since.

 

The facts are that since 2020, as the financial markets roared higher, participation by lower-income workers in employer-sponsored retirement plans declined, even as their access to plans increased. The number of workers who opened accounts decreased by 8 percent. For many, the myth that Social Security will still be there in the future to take care of them persists, although confidence in that assumption has declined from 43 percent to 36 percent, according to AARP.

 

Truth be told, the president is simply hitching his wagon to a Biden-era plan called the Saver's Match, a provision from the 2022 legislation known as Secure 2.0. Under that legislation, single taxpayers with a modified adjusted gross income of up to $20,500 (joint filers, up to $41,000) qualify for a government match of up to $2,000 on a qualified retirement account contribution. The saver would receive a $1,000 match per year.

 

Single filers with annual incomes of between $20,500 and $35,500 (joint filers up to $71,000) would qualify, but for a reduced matching contribution. Trump would like to up the qualifying salary range. I suspect he is also hoping that the name "Trump" on this new website might attract more lower-income workers to at least consider saving.

 

His plan to increase the cap to $35,000 would require congressional approval. "To take it to the next level, we need congressional approval, which should be very easy to get. It should be bipartisan," Trump said. He is probably correct, since there is bipartisan support for persuading more low- to moderate-income people to open employee-sponsored plans.

 

There are already several proposals in Congress, such as the Retirement Savings for Americans Act and the Automatic IRA Act, that confront this issue. Readers know I've analyzed these measures in previous columns. The hope is that by sweetening the incentives to save, more Americans will become committed to saving for retirement. Given the grim state of Social Security, we'd better hope so, or future generations of retirees may erupt in protest.