In 2024, remittances from U.S.-based migrants to Latin America reached a record $160 billion, with $64 billion going to Mexico alone—accounting for 3.5% of Mexico's GDP. US President Donald Trump plans to impose a 3.5% tax on these transfers, causing concern among recipients like Estela Vallejo, who fear reduced income and increased financial strain. Critics argue the tax is politically motivated and economically negligible for the U.S., but significant for Latin American economies, particularly in regions reliant on remittances. Migrants may resort to alternatives like cryptocurrencies or informal cash transfers, raising fears of increased illegal activity and money laundering. Experts warn the measure could destabilize entire communities across Latin America that depend heavily on these funds.
This video summary was created by AI from the original DW script. It was edited by a journalist before publication.