President Trump's immigration crackdown is causing one of the sharpest slowdowns in U.S. population growth in decades. Economists are beginning to tally the effects, with some warning that the damage will stick around.

Why it matters: The policy-driven immigration reversal underway has few modern parallels. The immediate result is evident in monthly employment figures, with the economy cranking out fewer jobs.

• But over time, fewer immigrants could be a productivity drag lasting well into the second half of this century.

The intrigue: Federal Reserve analysis earlier this year found that the breakeven rate — the monthly job gains needed to hold unemployment steady — had dropped close to zero as an immigration slowdown weighed on labor force growth.

• In other words, negative job numbers no longer reliably signaled a downturn.
• Now, a new paper examines state-level data for clues about whether that mix — slow population growth plus near-zero employment gains — leaves the labor market more vulnerable to shocks.
• The Congressional Budget Office projects potential labor-force growth to slow over the next decade, averaging less than half its 2025 pace as lower immigration weighs on workforce growth.

Zoom in: States with slower population growth saw more sluggish employment, with more frequent job losses, relative to states with faster population upswings, the paper — by a group of Fed board economists — found.

• Such characteristics "may be expected for the U.S. labor market with slow population growth even with a stable unemployment rate," the economists write.
• However, tepid population growth alone is not enough to make the U.S. labor market more susceptible to an economic shock, the paper says.

Yes, but: "Importantly, this analysis does not conclude that the current labor market is on solid footing, rather just that low population growth and near-zero employment growth are not by themselves necessarily indicative of weakness," the Fed economists write.

• They add that the current shift in population growth has been triggered by immigration shifts, "which have limited parallels in other advanced economies and may evolve more rapidly than in past episodes experienced by other countries."

What to watch: New research from Yale Budget Lab shows that the productivity costs of slower flows of authorized and unauthorized immigration could outlast any single administration's policies.

• Even a temporary immigration slowdown could leave the U.S. with as many as 4.6 million fewer working-age people than it would otherwise have had by 2033, a gap that persists for decades, Yale finds.
• The paper estimates that economy-wide productivity could be lower by between 0.25% and 0.44% by 2052, depending on the severity of the immigration reduction — a result of downward pressure on new business creation.

What they're saying: "At a time when policymakers are hoping for a boom from increased productivity growth, decreased immigration undermines that goal by removing entrepreneurs (and their children) who would have started new businesses," Abhi Gupta, an economist at Yale Budget Lab and author of the research, tells Axios in an email.

• "Fewer immigrants today leaves a demographic echo lasting decades, leading to persistently fewer entrepreneurs and a less dynamic economy," Gupta adds.

A war of words between U.S. and Canadian officials has raised the risk of a blow-up in North America's signature trade deal. This week offered, perhaps, the first hint of a thaw.

Driving the news: Canadian Prime Minister Mark Carney signaled a desire for stronger U.S. ties — a shift in tone relative to earlier this year, when he suggested integration had created "vulnerabilities."

• "Let's be absolutely clear: A 'Canada Strong' will help make America great again," Carney said yesterday at the Economic Club of New York, borrowing Trump's slogan to pitch a deeper partnership on autos, aluminum and critical minerals.
• Acknowledging U.S.-Canadian tensions, Carney said: "We have always worked and eventually worked through [our differences], because we share values and our common interests run deep."

Between the lines: Already fraught bilateral tensions have taken a more adversarial turn ahead of the mandatory USMCA review, which requires the three countries to decide by July 1 whether to extend the agreement for another 16 years.

• Deputy U.S. Trade Representative Rick Switzer said last month that there's "not a grown-up in Canada in charge."
• While Carney was in New York, U.S. officials announced formal USMCA renegotiation dates with Mexico — with no talks set yet with Canada.
• Canada has sought stronger trade ties with the rest of the world, a deliberate push to reduce dependence on the U.S. market as Trump ratcheted up tariffs.

The big picture: Carney did not mention USMCA by name, though his call for a "Fortress North America" hinted at the deal's importance.

• Carney, a former two-time central banker, framed Canadian aluminum exports to the U.S. as "the energy equivalent of 10 Hoover Dams," arguing it made little sense to replicate that capacity domestically.
• Carney said that the North American market was "the best and most durable way to confront" intense global competition.

The bottom line: USMCA has shielded the U.S. from the worst of its own trade policies, though U.S.-Canadian tensions raise the risk that buffer will disappear.

• "It's still the case that 85% of our trade goes across tariff-free. ... Everyone benefits from that," Carney said.