20 Percent Tax On Mexican Imports To Pay For The Border Wall: President Trump

One day after President Trump announced his plans to build the border wall between the U.S. and Mexico, White House Press Secretary and Communications Director for President Donald Trump Sean Spicer revealed that the Trump administration plans to impose a 20 percent tax on all Mexican imports into the United States to make Mexico pay for the wall. According to the New York Times, President Trump privately discussed this proposal with congressional Republicans before giving remarks at a party retreat. If the president goes ahead with the plan to impose an import tax on Mexican goods, this would be a major new economic proposal that would have a sizable impact on consumers and manufacturers. The move is also set to further strain the relations between the U.S. and Mexico.

According to Mr. Spicer, the 20 percent tax levied on Mexican imports would raise over $10 billion a year and would easily cover the cost of the border wall which is expected to cost anywhere between $8 billion and $20 billion. He went on to add that the the value of all goods imported from Mexico in 2015 alone was $296 billion and that taxing imports from foreign countries is a common practice globally with over 160 other countries also doing the sane.

Announcing the proposals, Sean Spicer told reporters,

“If you tax that $50 billion at 20 percent of imports — which is, by the way, a practice that 160 other countries do — right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous. By doing it that way, we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding.”

The move to impose import taxes on Mexican goods is very controversial and is likely to be met with stiff opposition from business leaders in the U.S. However, Spicer did not agree. He said,

“This is something that we’ve been in close contact with both houses (of Congress) in moving forward and creating a plan. It clearly provides the funding and does so in a way that the American taxpayer is wholly respected.”

Meanwhile, recent developments have already resulted in considerable straining of relations with Mexico, hours after President Trump said he would go ahead with his plans for the border wall and that he would make sure “Mexico will pay for it.”

Mexican President Enrique Pena Nieto said there is no way Mexico would do it. However, he did not initially call off an official visit to the U.S. However, just hours later, President Trump indicated that he is not really interested in meeting the Mexican leader following which Mexico called off the trip. The visit was canceled after Trump tweeted out the following statement.

“The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting.”

Had things gone as planned, Pena Nieto would have met President Trump on Tuesday to discuss immigration, trade, and drug war cooperation.

Most Mexicans believe President Trump’s decision to go ahead with the border wall could end up causing serious economic pain to their economy. One of the biggest concerns among Mexicans is the likelihood of increased crackdown on illegal immigrants and the renegotiation of the North American Free Trade Agreement, or NAFTA, which has allowed trade between the U.S. and Mexico to increase over the years. According to current estimates, each day, goods valued over $1.4 billion are transported across the border between the two countries.

The easing of trade relations between the two countries meant Mexico has resulted in becoming the second-largest customer for American-made products. The other way round, 80 percent of Mexican exports include things like automobiles and flat-screen TVs.

According to Margarita Zavala, a possible candidate for the Mexican presidency in 2018, the wall would end up causing “human suffering.”

“When we are talking about building a wall, about deporting migrants, about eliminating sanctuary cities [for migrants], about threatening to end a free-trade agreement, or to take away factories, we are really talking about causing human suffering. And after today, without a doubt, it is very difficult to negotiate from behind a wall.”

[Featured Image by Matt Rourke/AP Images]