US-Mexico border barrier at Tijuana pedestrian border crossing Photo by Toksave via Wikimedia Commons
In what is going to be a major move, President Trump may make Mexico pay for his border wall by imposing a 20 percent tax on all imports into the United States from the neighboring country. The Trump Administration hopes to raise billions of dollars that would cover the cost of the new barrier.
Sean Spicer, the White House press secretary, said the president discussed the proposal privately with congressional Republicans before giving remarks at a party retreat. The move would mark a major new economic plan with far-reaching implications for consumers, manufacturers and relations between the two governments.
According to Spicer, a 20 percent tax on annual Mexican imports would raise $10 billion a year and would easily pay for a border wall that is estimated to cost between $8 billion and $20 billion. The value of imported goods from Mexico in 2015 was $296 billion. Spicer said taxing imports is something that 160 other countries already do.
The new tax would be imposed on Mexico as part of a tax overhaul that Trump intends to pursue with the Republican Congress. Spicer said the tax initially would apply only to Mexico, but that the president supports imposing a 20 percent tax on all imports.
Trump would need new legislation to enact such a comprehensive tax on Mexican imports.
The move follows cancellation by the Mexican president of his planned summit with President Trump in the face of insistent tweets from the U.S. president demanding Mexico pay for a border wall. The issue has caused a deepening rift that threatens Mexican efforts to salvage trade ties.
Trump presented the scrapped plan as a mutual agreement. Addressing Republican members of Congress at a meeting in Philadelphia, he said he and Pena Nieto had agreed to cancel the meeting, adding it would be fruitless if Mexico did not treat the United States “fairly” and with respect.
