Trump Immigrant Order and Markets

Trump Immigrant Order and Markets
David R. Kotok
Cumberland, February 8, 2017


Note: This is a different perspective than mine, but I wanted to share it with readers for the purpose of debate and discussion – BR.


We received a large volume of email on the Trump immigration order debate. Views are about evenly divided for and against, with many passionate assertions and opinions. We are not running a blog; but, that said, the sheer number of responses has triggered this commentary. We do not expect to change anyone’s mind. We would, however, like to offer a few facts, with citations.

It is clear that the Trump order has affected a lot more than just 109 temporarily detained or inconvenienced travelers. And the effects of the order are estimated between 60,000 and 100,000 revoked visas depending on which government source is cited. The impacts of this executive order debate on the economy, the education system, on social disorder, and on geopolitical risk continue to grow.

Financial analyst Byron Callan, writing for the excellent Washington briefing service Capital Alpha, noted as follows:

“Iraq is the only country included in Trump’s Jan. 27 executive order on Muslim immigrants that is currently a U.S. defense customer. That country ordered 36 Lockheed Martin F-16s, of which ~8 remain in Lockheed Martin’s backlog. Iraqi pilots are being trained in Tucson, Arizona by the Arizona Air National Guard’s 162nd Wing, and there are weapons and parts sales to operate these combat jets. Iraq had taken delivery of 140 General Dynamics M1 tanks that were ordered in 2008 (though some of these were lost to ISIL) and that GD now supports. There have been plans since 2014 for another 175 valued at $2.4 billion, but that order has likely been on hold due to lower oil revenues and the immediate costs of Iraq’s battle with ISIL. If the current dispute over the Jan. 27 order extends to retaliatory measures by Iraq, such as barring U.S. citizens, the 2017 earnings impact on U.S. contractors would appear immaterial. There are broader factors that may need to be considered by defense investors, including whether Iraq diversifies its future defense suppliers away from the U.S., and how the offensive fares against ISIL.”