Despite 15 months of delusional claims and raucous rally chants, Mexico will NOT be paying for a southern border wall.
Sorry Trump voters, you were duped by one of the greatest cons of all time. American taxpayers, not Mexico, will be funding Trump’s narcissistic wet dream of an infrastructure project.
Donald Trump is proposing a 20% tax on Mexican imports to ‘pay’ for Trump’s Trillion Dollar Border Wall. Let’s breakdown precisely why this is a bad idea:
(1) American Taxpayers Still End Up Paying For The Wall
– Unless the proposed 20% import tax on Mexican goods is explicitly linked to a tax cut and/or tax refund to all Americans, then taxpayers will NOT be reimbursed for the Wall.
– The 20% import tax will simply be funneled into the coffers of the federal treasury and be spent on the day to day expenses of the federal government. This means that Americans will still end up paying for Trump’s wall, not Mexico.
– We must make Trump pay a political price for his epic flip-flop, as his half baked plan forces American taxpayers to pay for his trillion dollar wall. Meanwhile, Congress has absolutely no intention of paying Americans back!
(2) A Tax On Imports Is NOT A Reimbursement For The Wall
– Unless this import tax is backed up by an explicit “fund” earmarked to pay for the Wall, there is no guarantee that import tax generated funds will be directed toward Congressional funding for the Wall.
– This means that American taxpayers will not only pay for Trump’s wall, but the proposed 20% import tax may end up funding the day-to-day operations of the Federal government and NOT the Border wall the proposed tax is intended to fund.
(3) Mexico Will Likely Reciprocate By Slapping A 20% Tax On U.S. Goods
– We cannot view Trump’s proposal in a vacuum because a trade war with Mexico will likely impact U.S. exports as well.
– If Mexico were to reciprocate with a 20% tax on U.S. goods, in reality this will mean that American companies will be forced to pay import duties directly to the Mexican government. This effectively means that Americans will be paying Mexico for Trump’s trillion dollar wall. That is the complete opposite of making Mexico pay for Trump’s wall!
– Forcing American companies to pay for the Wall was NOT part of the deal. This will hurt exporters, make American goods more expensive, and hurt profits and job growth all across the country.
(4) American Taxpayers Will End Up Paying For Trump’s Wall Twice
– Trump and his GOP Congress will not only force American taxpayers to pay for the Border Wall upfront, but his proposed 20% tax on Mexican goods will simply force Mexican exporters to pass on the costs to U.S. consumers.
– In short, Americans will be forced to pay more money to buy goods produced in Mexico, such as cars sold in America, to Americans, by General Motors, Ford, and Chrysler.
(5) A Trade War With Mexico Will Lead To Massive Layoffs Across America
– First, the extent to which the economies of the United States and Mexico are interdependent cannot be overlooked. Both countries rely heavily upon cross border trade and consumption.
– Second, post-NAFTA the lines between businesses operating in the U.S., Mexico, and Canada have become so blurry that for all intents and purposes the supply chains are one in the same. That is to say, American companies such as Boeing, GM, and Carrier produce goods in Mexico and Canada that are destined for the U.S. market.
– Therefore, a 20% tax on imports effectively hurts American companies more than the Mexican government because the supply chains operate across a non-existent commercial border. It will be very costly for American companies to adjust their operations to respond to Trump’s threat to impose tariffs.
– Not only that, but the uncertainty this creates for businesses operating across North America is massive. Executives may choose to invest elsewhere, cut costs, and layoff workers to hedge against the potential disruption.
– American companies will be hurt most by this arrangement, as companies such as Ford, Carrier, and General Motors rely heavily on the free trade rules laid out by NAFTA.
– Ergo, when Ford produce trucks in Mexico and import those trucks back across the border to showrooms across Texas, these trucks are not subjected to import tariffs. Under Trump’s scheme to slap a 20% tax on Mexican goods, American companies operating in Mexico will pay a heavy price as they will be forced to either raise prices or absorb the costs themselves.
– This could lead to massive layoffs across the United States as American companies become less profitable or demand for