It would seem President Trump has a solution to his funding problem for the wall. Trump’s answer, as it seems to be with any country who doesn’t immediately agree with him, is to suggest a Mexico tariff. But that may not be such a good idea – especially with our neighbor to the south. And who really gets stuck paying for the wall if he does?
Why Should Trump Hesitate to Put a Tariff on Mexican Imports?
Donald Trump can’t just approach everything with the threat of a tariff. Especially as a source of funding. Mexico is a major trade partner for the U.S. In fact, Mexico is America’s third largest supplier of imported goods. Last year, that trade totalled to the U.S. importing $295 billion in goods from Mexico. Yes, a 20 percent tariff would generate an additional $59 billion for the country. The only problem there? That cost doesn’t go to Mexico, but gets passed onto the American consumer.
Mexico’s major import categories include vehicles, electrical machinery, fuel, and medical instruments. On top of that, Mexico is our second largest supplier of agriculture, including fresh fruits and vegetables. A tariff could make a lot of these imports unaffordable to many Americans, leaving the country worse off than before, and still having to pay for its own wall.
Trump’s tariff idea came up after Mexican President Enrique Peña Nieto canceled a scheduled meeting with the US president after Trump signed an executive order Wednesday to expedite the building of his border wall and Trump’s promise to have Mexico to pay for it. Once Nieto swore there’s no way Mexico would pay for any wall, Trump promised they would — in some form. But after concern from both sides of the aisle about the tariff, Trump’s press secretary backed off the tariff, claiming it was just one option out of several the administration is considering. Spicer refused to acknowledge that the tariff would affect American consumers, and solely focused on the tax’s benefits for American workers.
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But any way you look at it, a tariff on Mexico is a bad idea. That would instantly start a trade war with our third largest trade partner, hurting only American consumers and potentially driving up national debt in the process.
A possible solution?
Trump might want to actually restructure NAFTA instead of withdrawing from it, as both Republicans and Democrats alike are encouraging him to do.
Here’s a news report from CNN on really paying the US-Mexico wall:
After all, as Sen. Lindsey Graham tweeted, “…any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea.”
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