Last Wednesday, Donald Trump formally ordered the construction of the infamous wall that will be built along the southern U.S. border. It’s a wall the president believes will improve ties with Mexico, despite walls being an international symbol of division. Trump followed this announcement with a payment plan to include a 20 percent tax on all imports from Mexico, a nation that just so happens to be one of America’s biggest trade partners. (It should be added that the United States is the foremost buyer from the country, accounting for roughly 80 percent of Mexican exports.)
Mexico’s President, Enrique Pena Nieto, wasn’t happy with the proclamation and abruptly cancelled a forthcoming trip to Washington, spreading the word on Twitter. Considering the U.S. and Mexico conducts around $1.6 billion a day in cross-border trade (not to mention shared responsibilities that include migration policies, anti-drug enforcement and mutual discussions on threatening environmental issues), these declarations have understandably embittered Mexico and their government.
On Friday morning, a report exclusive to Reuters revealed that the U.S. Department of Homeland Security is now estimating the costs of building the wall to be almost double the figure Trump cited on his campaign. Altogether, instead of $12 billion, officials are projecting the three-year project spanning 1,250 miles would cost Americans $21.6 billion.
According to earlier statements from Sean Spicer, the White House’s Director of Communications, taxing items imported from Mexico by 20 percent would pay for the wall in just over a year. “This is something that we’ve been in close contact with both houses in moving forward and creating a plan,” Spicer expressed, adding that while Trump is looking to tax imports on all countries that the U.S. has trade deficits with, for now, they’re solely dealing with Mexico.
Now what does that $21.6 billion price tag mean for us? For one, Mexico isn’t paying for the wall as it was initially proposed. We’re the ones paying. As it currently stands, half of all non-agricultural goods enter the U.S. duty free, according to the office of the U.S. Trade Representative. The other half face import tariffs that average just two percent. To increase this relatively non-existent tax to 20 percent will certainly hollow out America’s wallets, especially when purchasing commonplace things like booze, wine, beer, fruits, veggies, as well as non-consumable items like televisions, kitchen appliances and vehicles.
“A tax on Mexican imports to the United States is not a way to make Mexico pay for the wall, but to a way make the North American consumer pay for it through more expensive avocados, washing machines and televisions,” Mexican Foreign Relations Secretary, Luis Videgaray, declared in an attempt to offer sense to the more steadfast wall supporters after Trump’s announcement.
Sceondly, while a falling out with Mexico would leaving a gaping wound on the American economy, we’d likely recover, even if it means $4 avocados. This same outcome is much less likely for Mexico’s economy, who’d more or less be left for dead. Considering this outcome, it’s practical to assume that the wall would spur more people fleeing Mexico to the United States via underground tunnels. Of course, that outcome completely undermines Trump’s initial goal was to cease illegal immigration.