by Jay Bookman, Georgia Recorder, [This article first appeared in the Georgia Recorder, republished with permission]

November 21, 2024

On Jan. 20 a new administration takes power in Washington, and boy does it have plans … lots and lots of plans. If carried out as described in the recent presidential campaign, those plans have the potential to fundamentally remake the American economy, for better or worse.

The stakes are particularly important for Georgia.

For a generation or longer, reaching back to the audacious and surprisingly successful effort to woo the Olympics to Atlanta in 1996, Georgia has been working to remake itself, to transition into a fully integrated, sophisticated player in a globalizing economy.

It has the world’s busiest airport. It has invested billions of dollars in port infrastructure in Savannah and Brunswick, with billions more committed. It has become the most important logistics center in the southern United States, employing hundreds of thousands of working Georgians. 

However, the high tariffs championed by the incoming administration are incompatible with a global economy. Tariffs are designed to break that system, to slow if not stop the container-ship traffic into Savannah, Brunswick and other ports. When other countries retaliate by raising tariffs of their own, as they will, America will also export considerably less as well. 

Those effects will not occur by accident; they are not a side effect of tariffs. They are the outcome that tariffs are designed to produce.

Leveraging federal and state incentives, Gov. Brian Kemp has also attempted to make the state a global leader in electric vehicles and batteries, a bet with enormous potential but still uncertain success. Among other projects, state and local officials have committed $3 billion in incentives to lure a new Hyundai electric-vehicle plant near Savannah and a Rivian electric-vehicle plant east of Atlanta.

But Kemp’s attempt to remake Georgia into the “e-mobility capital of the world,” to become to electric vehicles what Detroit became to gasoline-powered vehicles, is also vulnerable. Our newly elected president dismisses climate change as a real issue and views electric vehicles not as the technology of tomorrow but as a threat to the dominance of the internal combustion engine.  As a result, tax credits and other federal investments in electric vehicles that have given the technology a major boost now seem likely to be cut back severely. 

(Elon Musk, CEO of Tesla and a top adviser to our new president, supports such reductions. Having captured almost 50% of the domestic EV market, Tesla can only benefit if smaller comanies lack the resources to scale up production and sales to compete.)

In addition, the incoming administration was elected on harsh promises of mass deportation of millions of undocumented immigrants. That includes the removal of so-called “Dreamers,” those immigrants brought here illegally as young children and have known no country but this one. It also calls for an end to birthright citizenship, granted to any child born here in the United States. Setting aside the difficulty of implementing such policies humanely – humanely doesn’t seem much of a concern of these policymakers – what are the likely economic impacts?

First, the cost would be enormous. As others have pointed out, the total number of people in U.S. prisons – federal, state and local – is roughly 1.2 million. Scaling up a program to find, arrest and deport ten times that many people, then shipping them to countries that would probably refuse to take them, would seem an impossible task. Nonetheless, our president-elect seems intent on trying, announcing this week that he would declare a national emergency on his first day in office that would allow him to enlist the U.S. military in the effort.

If you spend any time in agricultural areas of Georgia, it quickly becomes obvious how tightly immigrants — many of them undocumented — have been integrated into those local economies and communities, and what trauma would ensue if they were forcibly removed en masse. The poultry, peanuts, blueberry, onion and other farm sectors in the state would suddenly face a serious manpower shortage. And with a minuscule 3.6% jobless rate in Georgia, there’s not a lot of cushion in the state’s labor market to fill the vacuum.

In urban areas, restaurants, hotels, service industries and construction already have a hard time filling job vacancies and have had to raise wages and pass those costs along to consumers. If this talk of mass deportation proves to be more than bluster, the resulting manpower shortage would accelerate inflation considerably.

That might prove particularly true for the price of food. Tariffs will make imported food more expensive; mass deportation will make home-grown food more expensive. So if the incoming administration proves as dead-set on implementing its promised policies as it so far appears to be, buckle your seatbelts, Georgia, we’re in for a bumpy ride.

Georgia Recorder is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Georgia Recorder maintains editorial independence. Contact Editor John McCosh for questions: info@georgiarecorder.com. Follow Georgia Recorder on Facebook and X.