Massachusetts Economy Could Lose Billions Annually Due to Trump Administration Policies: BU Study

Trade Tariffs, NIH Funding Cuts, and Immigration Policies Could Result in Massive Economic Impacts to Massachusetts, according to BU Questrom Study

The Massachusetts’ economy has been disproportionally harmed and could lose billions of dollars per year as a result of recent Trump Administration policies, according to a new study from Boston University Questrom School of Business.

The study, “The Economic Impact of Trump Policies on Massachusetts,” was led by Professor Mark Williams and focuses on Massachusetts’ economic vulnerabilities in the face of Trump Administration policies. According to the study, the unfavorable policies that carry the largest economic damage include: tariff hikes, National Institutes of Health (NIH) funding cuts, and immigration crackdown. Collectively, these policies harm the Massachusetts economy by shrinking growth, tax revenue, labor supply, and generating spillover risk.

“The state’s economic health is closely tied to that of the U.S. as a whole,” said Professor Mark Williams, a Boston University Questrom School of Business master lecturer and the study’s primary researcher. “The Trump Administration’s tariff war has triggered a market downturn, increasing the likelihood of a national, or even global, recession, which could reduce Massachusetts’ annual income tax revenue by billions of dollars.”

Tariff Hikes

On the trade front, Massachusetts' three largest trading partners, Canada, China, and Mexico, have all been adversely impacted by tariffs. Higher tariffs increase costs of imported goods such as electricity and wood, as well as reducing demand for goods sold, including medical devices and high-tech instruments. In 2026, tariff hikes could cost the state $12.8 billion in lower economic growth, almost $1 billion in lost tax revenue, and up to 79,000 in lost jobs. Should a severe recession occur, these losses could double. Even under the best-case scenario, where high tariffs are removed and a recession is avoided, the state remains financially vulnerable.

NIH Cuts

New policies harm Massachusetts’ core medical-education sector including universities, research hospitals, and institutions that feed the vibrant life sciences ecosystem. In 2026, NIH cuts could stall this industry, costing the state up to $2.2 billion in diminished economic activity, and 14,000 in jobs lost. If federal cuts become permanent, it could undermine the state's competitive advantage and global lead in the life sciences. In total, ongoing NIH funding cuts could cost Massachusetts more than $12 billion, according to the study.

Other Massachusetts programs such as MassHealth are also vulnerable to cuts in reimbursements, which could potentially increase costs by up to $1.3 billion per year.

Immigration Crackdown

Immigrants are vital to the Massachusetts economy in terms of population, labor supply growth and as a catalyst for entrepreneurial ventures and job creation. Massachusetts has the 5^th-highest percentage of its population who are foreign born, and immigration crackdowns threaten to weaken immigrant spending power, taxbase, labor and workforce growth.

Spillover risks have also been heightened by new federal immigration policies, according to the study. For example, visa cancellations, student deportations, and threats to block foreign student entry could cause a steep decline in foreign student enrollment within Massachusetts colleges and universities. There are currently 82,000 international students among higher education institutions across Massachusetts, a population which contributes $3.9 billion per year in economic growth. According to the study, these figures could drop by at least 10% due to Trump Administration policies, putting colleges at greater financial risk. Learn more about the importance of immigration to the Massachusetts and U.S. economy here.

Anti-immigration policies including travel bans could lower Massachusetts-based foreign tourism up to 30% by 2028, reducing economic spending by $1.1 billion, and cutting visitor traffic by 630,000. If Trump Administration policies persist, and the stable economic growth trajectory of Massachusetts’ core industries becomes altered, state bond downgrades could also occur.

“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.”

Read the full study, “The Economic Impact of Trump Policies on Massachusetts,” here.

About Mark Williams

Mark Williams is a faculty member in the Finance Department at Boston University’s Questrom School of Business and the former President of the Boston Economic Club.

About Boston University

Founded in 1839, Boston University is an internationally recognized institution of higher education and research. With nearly 37,000 students, it is one of the largest private residential universities in the United States. BU consists of 17 schools and colleges, along with the Faculty of Computing & Data Sciences and a number of multi-disciplinary centers and institutes integral to the University’s research and teaching mission. In 2012, BU joined the Association of American Universities (AAU), a consortium of leading research universities in the United States and Canada.

About Boston University Questrom School of Business

Founded in 1913, the Boston University Questrom School of Business is a global top-tier academic research business school. Led by Allen Questrom Professor and Dean, Susan Fournier, Questrom develops business leaders who create value for the world. Questrom redefines transformational business programs, strengthens partnerships with the business community, advances the impact of research on business, and manages the school as a high-performing enterprise committed to excellence with a service mindset. Comprising a renowned full-time faculty of 165 researchers, teaching faculty, and accomplished practitioners, Questrom generates insights to address today’s business challenges and prepares students with the tools they need to succeed from Day 1 in their professional lives. Questrom’s portfolio of academic programs is robust and includes a Top 20 undergraduate program of over 2,200 students; distinctive MBA offerings including 900 students in a full- and part-time MBA, the affordable Online MBA and specialty MBAs in social impact, health, and digital technology; several thriving specialized masters programs in areas including business analytics, mathematical finance, and management studies; and a rigorous PhD program. More than 50,000 Questrom alumni form a powerful global network of leaders driving value creation that changes the world.

QUESTROM MEANS BUSINESS. For more information, visit bu.edu/questrom.

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“The Trump Administration’s tariff war has triggered a market downturn, increasing the likelihood of a national, or even global, recession, which could reduce Massachusetts’ annual income tax revenue by billions of dollars.”