A new kind of border rush isn’t happening at checkpoints—it’s unfolding at cash counters and phone apps. As deportations rise and new taxes loom, migrants are wiring money home at record speed. Fear is driving dollars, and Latin America’s most fragile economies are shaking from the surge.
Fear, Deadlines, and the Wire
For Kevin M., an undocumented Ecuadorian restaurant worker in Manhattan, every payday feels like a countdown to the next one. “I’ve been sending more money back home because you never really know what could happen,” he told Newsweek. “I still have debts in Ecuador, and I don’t want to fall behind.“
His logic is shared by hundreds of thousands of others: send what you can before you’re sent back with nothing. Since President Donald Trump’s return to office, his administration says it has removed more than two million people, including 400,000 deportations. That uncertainty has supercharged the region’s financial arteries.
Remittances from the U.S. to Latin America are on track to hit $161 billion this year, up 8% from 2024, according to data cited by Newsweek from PYMNTS. In Honduras alone, the total has jumped 25% in the first eight months of the year. “There is definitely a family decision on the side of migrants to send as much as they can now,” said Manuel Orozco, who leads the migration, remittances, and development program at the Inter-American Dialogue in Washington. “They won’t be able to keep sending money once they return home,” he told Newsweek.
Transfers are growing larger, too. Orozco said the typical payment has climbed from $300 to $400—an increase he warned can’t last. “It exceeds income limitations,” he said, noting that even a 5% drop in remittances could shave a whole percentage point off Guatemala’s GDP. It’s a paradox of fear: a short-lived boom that may plant the seeds of a longer bust.
The One Percent That Changes Behavior
In July, Congress passed the One Big Beautiful Bill Act, a sprawling tax-and-spend package whose smallest clause has the most significant effect on migrants: a 1% tax on remittances sent abroad through cash agents, money orders, or cashier’s checks. The rule exempts bank transfers and debit or credit cards—channels that many undocumented workers can’t access.
For the unbanked, it feels like a timer. “They’re cashing out,” Orozco told Newsweek. “People are treating this year like a deadline.“
The response has been immediate. “They’re taking out their savings, everything they have,” said Aleyda Velásquez, a U.S. citizen who supports her elderly aunt in Colombia. “If they own things, they sell them or leave them with someone they trust.“
Velásquez said her friends wiring money to Mexico, Honduras, and Nicaragua are especially nervous. “They don’t know what the next rule will be—if their money will be taxed or blocked,” she told Newsweek. Even as transfer platforms raise fees, many are still rushing to send what they can.
Kevin said his weekly remittances have doubled, forcing him to make sacrifices in New York. “I cut back on almost everything here,” he told Newsweek. “But my family depends on that money more than ever.“
The policy ripple has reached far beyond the border. Colombia, which received a record $11.8 billion in remittances in 2024, could lose between $60 million and $360 million a year, depending on how many migrants shift to tax-free channels, according to figures cited by Newsweek. Over 80% of that money is allocated to cover expenses such as food, rent, utilities, and education. A tax collected in the U.S. will be felt in Colombian kitchens.
Macroeconomics Ride on Microwires
Every dollar wired home is both a survival and a policy in motion. In 2024, global remittances totaled $534 billion, with nearly one-fifth of the amount coming from the United States. Latin America’s economies are uniquely exposed—remittances make up as much as 30% of GDP in some countries—and the latest surge is both a blessing and a curse.
Mexico, the region’s biggest recipient, is an outlier. Its remittances dropped 5.8% in 2025, reflecting an aging migrant base and a decline in new arrivals. But elsewhere, money is flowing fast, especially to Central America and the Caribbean, where remittances are the backbone of household budgets.
Supporters of the new levy frame it as patriotism by pocketbook. “Yes, it sends money back to people, but it also becomes a dependency,” said Ira Mehlman, media director for the Federation for American Immigration Reform. “If you’re sending your best workers out of the country and waiting for the money to come back, it impedes development at home,” he told Newsweek.
Opponents say the logic is upside-down. By taxing formal money transfers, they argue, Washington is nudging migrants toward unregulated, riskier systems—and risking deeper poverty abroad. “Undocumented migrants play a huge role in the U.S. economy,” said Rubi Bledsoe, a researcher at the Center for Strategic and International Studies. “A large number of them pay taxes and contribute to programs they can’t even use,” she told Newsweek.
The real issue, critics say, isn’t dependency—it’s how dependent the U.S. has become on these same workers, whose paychecks sustain both American service industries and Latin American economies. Each transfer is a story of labor exported and responsibility deferred. When policy tightens, the first thing to disappear isn’t a statistic—it’s a meal.
EFE/ Joebeth Terríquez
A Smarter Path Than Panic
There’s a better way to manage this moment of fear-driven finance. If the goal is to keep money onshore while discouraging undocumented migration, the answer isn’t a tax; it’s trust—making the formal channels cheaper, safer, and easier to use.
That starts with banking the unbanked. As the new law already exempts bank transfers and cards, migrants who have access to these tools are exempt from the levy. Policymakers could expand that exemption by providing local banks with legal clarity to open accounts for individuals who are not yet fully established in their immigration status.
Next, cut the hidden costs. Every remittance corridor hides an “exchange rate margin”—a quiet mark-up that often costs more than any official tax. Regulators could require platforms to post all-inclusive pricing, allowing senders to see the actual cost before they pay—lower competition barriers, lower fees, and lower fear.
Washington could also look southward, pairing enforcement with dignity—funding financial inclusion programs through the same agencies that patrol borders. Most of all, stop building countdowns that drive panic.
“If I get sent back, I won’t be able to send anything at all,” Kevin said. “So I send what I can now, while I can.“
That line is more than resignation—it’s a policy diagnosis. Fear moves money, but it doesn’t build prosperity. If Washington wants fewer migrants at its borders, it must strengthen the economies they leave behind, not strip cash from the families trying to survive there.
Also Read: Argentina’s Chainsaw Economics Meets Ballot-Box Reality and a Weary Nation
Until then, the wires will keep humming, the fees will keep rising, and migrants from Manhattan to Miami will continue to make the same desperate calculation: send it now, before the window closes.