The immigration crackdown is ‘much, much worse’ for business than tariffs, some CEOs say

While we all wait to see what’s next on tariffs, the shutdown, the Gaza ceasefire, and more, let’s consider the business impact of a policy that remains unchanged: the immigration crackdown. As an “essential” service, Immigration and Customs Enforcement (ICE) is largely unaffected by the shutdown and its deportations are unlikely to cease any time soon. This past week, several CEOs privately shared the impact that they’re already seeing in their businesses.

Fewer Customers. From the travel operator who told me the immigration crackdown is “much, much worse” for their business than tariffs to the manufacturer who said sales of their products are down by double digits in some southern states, concern about immigration action is causing some people to stay away or stay home. South Korea’s LG and other foreign firms have put limits on business travel to the U.S. after workers on temporary visas were detained earlier this year. The number of international students arriving in the U.S. in August fell 19% over last year, which means billions less in spending.

Less Productivity. This manifests itself in several ways. There is the obvious challenge in terms of the shortfall of workers in industries like agriculture, which could soon lead to food shortages and higher prices, according to the Labor Department. But companies that don’t have an issue with undocumented workers are facing the friction of having employees pulled aside by ICE officials. One CEO told me that these status checks are costing his company millions in delays and lost productivity.

More Fear. A cousin who is legally working in the U.S. told me that he’s reluctant to travel, even domestically, for fear that ICE officials might find something amiss with his paperwork. I thought he was being paranoid until a financial services executive told me last week that he’s seeing employees who are working here on visas act in a similar way. What’s more, he added, “some of our foreign-born customers are worried about being cut off from their bank accounts or credit cards.” Assurances don’t help: “They know we’re as much in the dark as they are.”

What about the argument that ICE raids will create jobs for American workers? “Maybe some day,” this executive said, “but right now, the disruption is hurting everyone.”

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

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CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.