Mexicans in US are sending less money home—Experts are divided on why

Mexican immigrants living in the United States are sending less money home to relatives via remittances, according to new research.

Remittances are the money migrants living in the U.S. send back to family members in their home countries. They are a major source of income for some communities, including in Mexico, which is the world’s second-largest recipient of remittances.

There are some 12.3 million Mexicans living abroad, with 97 percent living in the U.S., according to BBVA Research. In 2024, Mexicans living in the U.S. sent a record $63.2 billion home in remittances. However, in the first four months of 2025, the central bank recorded $19.02 billion in remittances, a 2.5 percent decrease from the same period last year.

This means that remittances sent to Mexico declined 12.1 percent in April compared to the same period a year earlier, according to central bank data. This is the steepest drop in over a decade.

Trump’s Immigration Crackdown

Since assuming office for the second time, President Donald Trump has vowed to crack down on border security, carry out mass deportations and end federal benefits for people residing in the country illegally.

Eri Zolov, a history professor at Stony Brook University in New York, said the “growing fear” of deportation might affect Mexicans’ remittance behavior.

“I would imagine that the recent decline in remittances reflects a growing fear that ICE agents may be lurking around the places where undocumented workers use to send money home,” he told Newsweek.

“This has already been demonstrated with raids at Home Depot stores (where day laborers traditionally congregated) and now at hotels and farms. I haven’t read that ICE raids have transpired at Western Union and similar remittance locales, but it would certainly be reasonable from an undocumented migrant’s perspective that these would be logical targets.”

He added that fear of detainment might encourage Mexicans to hoard cash rather than send it home.

“Moreover, as raids increase, more generally undocumented workers no doubt are holding onto their cash in the event they need to stay even further ‘under the radar’ and avoid working situations that may place them at risk,” he said.

Tony Payan, a U.S.-Mexico studies fellow and executive director of the Center for the U.S. and Mexico at the Baker Institute for Public Policy, agreed that the Trump administration’s “aggressive crackdown on immigration” is having an impact.

“Migrants may be finding it more difficult to work or may be considerably more cautious about the way they work,” he told Newsweek. “There is a substantive number of migrants that work as day laborers, and they may be abstaining from working for fear of the raids. Or, employers may be more hesitant to employ them for fear of being fined (although there does not seem to be any consequence for employers at this point, despite the law).

“On this same score, it could be that as the U.S. enters an economic slowdown, many employers may cut just those jobs that migrants occupy. Adding to this, migrants might be saving money in case they cannot find work and feel that they need to have a savings reserve, at least while the raids and current immigration policy against them eases out.”

Ana Lopez Garcia, an assistant professor of global migration at Maastricht University, disagreed.

“Actually, research shows that when people feel threatened with deportation, they often increase remittances to make sure they have something to fall back on if they return home,” she told Newsweek. “So I don’t think deportation is the main reason for the decline.”

Economic Factors

Indeed, for Garcia, economic factors play a larger role.

On April 2, which he dubbed “Liberation Day,” Trump announced tariffs on countries worldwide. Along with a 10 percent “baseline” tariff on almost all imported goods, Trump introduced “reciprocal” tariffs on some trading partners, such as 20 percent on the European Union and 26 percent on India.

Following the negative market reaction, Trump announced a 90-day pause on reciprocal tariffs, while maintaining the baseline rate.

This week, the Federal Reserve downgraded expectations for U.S. growth to 1.4 percent from 2.1 percent in December.

“What we’ve seen in the past, like during the 2007 recession, is that remittances to Mexico usually go down when the U.S. economy slows down,” Garcia said.

Barry Maydom, a senior lecturer at Birkbeck, University of London’s School of Social Sciences, agreed. He told Newsweek that while there had been a steady downward trend in remittances to Mexico, the “large drop” in April could be attributed to “greater economic uncertainty related to tariff policies.”

New Tax Policies

House Republicans added a provision to Trump’s “big, beautiful bill” that would impose a 3.5 percent excise tax on remittance transfers. The measure, which would exempt U.S. citizens, would impact more than 40 million people, including green card holders and those on temporary work visas, such as H-1B, H-2A, and H-2B. Mexican President Claudia Sheinbaum called the proposed measure, which has not come into effect, “unacceptable.”

Maydom said that it was “possible that Mexicans in the U.S. are starting to move towards using informal methods of sending remittances home (sending goods or cash by post, using informal money transfer networks) in anticipation of the potential remittance tax and in response to high-profile deportation actions.”

“The official stats only include formal transfers (through banks, Western Union etc), so a shift towards informal methods of sending remittances would show up as a decline,” he told Newsweek.

But Garcia suggested it was unlikely to have a big impact.

“While [the tax] hasn’t been applied yet, we should keep in mind that sending remittances to Mexico is quite cheap compared to sending money to other regions like Africa,” she said.