Massachusetts faces major economic risks from the Trump Administration’s policies that threaten critical sectors like life sciences, higher education, trade, and tourism, according to a new study led by Mark Williams, Master Lecturer of Finance. The report, The Economic Impact of Trump Policies on Massachusetts, estimates the state could lose billions annually due to trade tariffs, NIH funding cuts, and stricter immigration measures.
The study finds that even if tariffs are lifted, deep federal funding cuts and immigration crackdowns could still inflict lasting damage, particularly if a recession hits by 2025. Anti-immigration policies alone could reduce the labor force and shrink tax revenue by up to $2 billion over four years. A recession could deepen losses by another $1–2 billion in income tax revenue, potentially forcing state leaders to enact cuts, layoffs, or draw on emergency funds.
The life sciences sector, anchored by $3.5 billion in annual NIH funding—is especially vulnerable. Cuts could lead to over $9 billion by 2028 and trigger a “brain drain” of talent. Higher education institutions also stand to lose, as international student enrollment may decline due to visa restrictions and immigration uncertainty.
Meanwhile, tariff hikes affecting key partners like Canada, China, and Mexico could raise costs, disrupt supply chains, and slow economic growth. The study warns these impacts could ripple outward, increasing the risk of a global recession.
The report calls on state policymakers to prepare now for potential downturns and revenue shortfalls, emphasizing the need to protect Massachusetts’ economic resilience and global competitiveness.
“Massachusetts has not yet fully taken into account the economic repercussions of Trump policies or what a recession would mean for its state budget,” said Professor Williams. “If the 2008 recession is any indicator, drastic measures including cuts, layoffs, and dipping into the rainy-day fund could be required to keep the budget in balance.”
View the full study here.
