In the first week of his presidency, President Trump confirmed both fears and hopes that he was serious about building a wall between the United States and Mexico. The issue is that, despite his campaign promise, it appears virtually undeniable at this point: If the United States builds a wall on its Southern border, the American public will pay for it — not Mexico.
Trump maintains his position that even if Americans have to foot the bill initially, Mexico will reimburse the country for the wall. And while his plan is problematic, the much bigger issue is the specific nature of his proposal to get Americans to pay. One of the suggested plans involves a 20 percent tax on goods imported from Mexico. There are three major problems with this proposal that make the idea truly catastrophic.
First, Trump’s proposal is, in reality, a tax on the American consumer, not on Mexico — despite what many U.S. shoppers seem to think. Second, Mexico is a major provider for a variety of goods in the United States. In fact, according to the U.S. Trade Representative’s website, Mexico is the United States’ third largest trade partner. Mexico is the second largest supplier of agricultural imports, with fruits, vegetables, other food products, and alcohol totaling $21 billion in 2015. Such a trade tax would be far-reaching. Finally, countless experts have pointed out that a 20 percent tax could certainly plummet the U.S. into a trade war with disastrous results.
The 20 percent tax that the Trump administration has proposed is truly a tax on Americans. While it cannot be said that the administration was hoping to confuse the public about the nature of its proposal, there appears to be a growing misconception that Mexico — not America — pay a 20 percent tax. In reality, according to the New York Times, American retailers selling Mexican-made products would take on the tax burden and may ultimately pass that increase in prices onto the American consumer. The other alternative is for these companies to absorb the blow and lessen their profits. Either way, Americans and American companies are the losers here.
With Mexico as one of our most important trading partners, the proposal would have a huge impact on American consumerism. Consider the produce market; in an industry that already has high relative prices (fresh fruits and vegetables are often more expensive than junk food), the potential of increasing costs could prove problematic for people struggling to eat a healthier diet.
Whether Trump selects this option from the “buffet of options” to pay for his wall is yet to be determined, but with this selection would come even more uncertainty of the long-term impacts. In the end, the administration has done little to quell fears of an impending trade war and has only proposed ideas that in no way “make Mexico pay for it.”
The border wall was one of Trump’s primary campaign promises. But one has to wonder if so many would support its construction if the United States is the country paying for it. Fewer than two weeks into office, Trump has already put the relationship between the U.S. and several other countries at risk. This wall simply is not worth including one of our most valuable trading partners in this division and hurting the American consumer at the same time.