Remittances from undocumented Mexican citizens in the U.S. to Mexico are rising, despite increased immigration enforcement under President Donald Trump.
These remittance statistics serve as indicators of how strictly the federal government is applying immigration laws, given that many undocumented individuals work in the U.S. and send money back home.
As reported, the Trump administration has disrupted what was the 11th year of growth in remittances sent to Mexico by Mexican workers residing in the U.S.
Funds transferred home by Mexicans in the U.S. dropped over 15% compared to the previous year as we see a downturn amid Trump’s stringent immigration policies and proposed remittance taxes. [Emphasis added]
Banikosico, Mexico’s central bank revealed that remittances have decreased nearly 6% since the year’s onset, dropping more than 16% compared to last June. In June, $5.2 billion was sent to Mexico. [Emphasis added]
This marks a decline for the third month in a row. However, the average amount sent back is still $409 higher than the previous year. [Emphasis added]
In total, remittances from the U.S. to Mexico have reached around $63 billion over the past year—this is less than projections for 2023 and 2024.
The recent drop in remittances occurs just before Trump’s 1% remittance tax takes effect in January. The tax was initially proposed at 3.5% but was later reduced to 1% by Senate Republicans.
One of the significant factors affecting the remittance market is a protective measure that impacts Western Union’s dominance, as senders often have to navigate banking channels to transfer funds.
“[The exemption] relieved worries about most wire transfer operations and relocation activities they conduct,” a source noted.
While Western Union has seen a slowdown in remittances to Mexico, CEO Devin McGranahan stated that less than half of the company’s revenue would be affected by the remittance tax.
