Warnings that President Donald Trump’s mass deportations could disrupt the American economy are beginning to play out, with wholesale vegetable prices climbing and industries dependent on immigrant labor facing slowdowns.
Economists and industry groups point to the administration’s immigration crackdown—combined with tariffs—as a key factor behind rising costs and weakened business activity.
The Bureau of Labor Statistics reported Thursday that wholesale dry and fresh vegetable prices surged 38.9% between June and July, the sharpest monthly increase since March 2022.
Phil Kafarakis, president of IMFA The Food Away From Home Association, which represents food producers and suppliers, said deportations are leaving farms short-handed at harvest time. “You are now going to be left with not enough laborers in the fields to pick up and collect product,” he said, warning that the labor shortage is compounding the “horribly, incredibly impactful” effects of tariffs.
Extreme weather—drought, flooding, and wildfires—has further strained harvests, and Kafarakis cautioned that late summer and fall could bring even higher food costs. “I don’t think people realize” how sharply restaurant and grocery prices could rise, he added.
Although deportations have not yet reached the levels Trump promised on the campaign trail, Immigration and Customs Enforcement recorded its highest monthly arrests in at least five years in June.
Texas Businesses Feeling the Pinch
A Dallas Federal Reserve report released this week highlighted growing uncertainty in Texas’ economy. Business owners cited tariffs and immigration enforcement as key obstacles to investment and hiring. The survey noted that many firms were struggling to recruit and retain workers lacking legal status.
In its July survey, the Fed said the most widespread disruption was the inability to hire qualified workers without permits. One manufacturer summed it up: “Foreign-born laborers get the job done. We need them, we use them, and we like them.”
The Fed also noted that reliance on immigrant workers has grown. In 2024, 25% of Texas firms reported employing foreign-born staff, up from 15% in 2023—with about one-third of manufacturing firms dependent on immigrant labor.
Shrinking Workforce, Rising Costs
A report released Thursday by America’s Voice said the usual cycle of immigrant workers entering and leaving the U.S. has stalled due to border restrictions, reducing the labor supply.
Robert Lynch, an economics professor and report co-author, said agricultural and related employment fell by 155,000 workers—or 6.5%—between March and July this year, reversing gains seen in the same period in 2023 and 2024.
Construction has also been hit. States with the highest shares of unauthorized workers saw a slight decline in employment from June 2024 to June 2025, while other states experienced growth—though at a slower pace than the year before.
The leisure and hospitality sector, where undocumented workers make up about 7% of the workforce, is also lagging. States with high immigrant concentrations saw just 0.2% growth in food service jobs compared with 1.5% elsewhere, despite nearly one million unfilled hospitality jobs earlier this year.
Overall, the number of foreign-born workers nationwide dropped from 33.3 million in January to about 32.1 million in July—a loss of 1.2 million workers—according to the National Foundation for American Policy. Its executive director, Stuart Anderson, noted there has been no corresponding rise in U.S. labor participation, dampening business investment.
Tensions in Agriculture
United Farm Workers spokesman Antonio De Loera-Burst challenged the narrative of shortages, saying many workers are desperate for jobs but face reduced hours and intensified workloads. “We are dead set against deportations,” he said, accusing growers of using enforcement disruptions as leverage to expand guest worker programs at lower pay.
Trump has faced mounting pressure from agriculture and hospitality businesses for a stable workforce. His response has shifted—pausing raids in certain industries, resuming them, and more recently floating the idea of temporary passes for some workers.
