The White House today proposed a 20-percent tax on imports from Mexico as a way to fund the wall President Donald Trump wants to build on the U.S.’ southern border. During his campaign, Trump had said he would tax Mexican-made goods 35 percent.
The announcement follows a feud between Trump and Mexican President Enrique Pena Nieto that has reached a boiling point over the past 24 hours. Trump signed a directive to begin the process of building the border wall yesterday. Pena Nieto was supposed to meet Trump next Tuesday, but following an address yesterday where he stated that Mexico will refuse to pay for the wall, Trump suggested on Twitter that the meeting should be cancelled “If Mexico is unwilling to pay.”
“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico, if you tax that $50 billion at 20 percent of imports, by doing that we can do $10 billion a year and easily pay for the wall just through that mechanism alone,” White House Press Secretary Spicer told reporters aboard Air Force One.
Spicer would not elaborate on how the tax would work or how it would affect U.S. companies and consumers. He also would not comment on whether the tax might be applied to other countries, saying the administration is “focused on Mexico right now.” Later, he told reporters that the tax is just one idea the administration is exploring, and that the economic impact of such a tax would need to be looked into before going forward, Automotive News reports.
This rapid escalation comes just days after Trump met with the CEOs of Ford, FCA, and GM to urge them to build more cars in America. Ford cancelled plans to build a new plant in Mexico earlier this month, though CEO Mark Fields says the decision was based on slow car sales, not pressure from Trump. Many other automakers have announced (or sometimes simply repeated) their plans to invest in the U.S. in apparent efforts to appease Trump. Many have plants in Mexico or have plans to build factories in Mexico in the future.
It’s unclear if the tax will simply eat into companies’ profits or be passed on to the consumer, but Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, believes the buck will undoubtedly be passed to the American people.
“Mexico doesn’t pay for the wall,” Bernstein told AN. “American consumers who shop at places that import, like Walmart and Target, pay for the wall, making it a regressive tax supporting a dumb, wasteful idea.”
House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell suggested that they’re now ready to consider a proposal for a border wall, and contribute as much as $15 billion from the federal treasury toward its construction.
Source: Automotive News (Subscription required)
The post Trump Wants to Tax Imports From Mexico 20 Percent to Pay For Wall appeared first on Motor Trend.
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