As a candidate, Donald Trump promised Americans that he would build a wall on our border with Mexico, and that they would end up paying for it. At the time it was little more than feel-good rhetoric but now that he is President of the United States, he is making good on it.
The only problem is, Mexico’s President has asserted that he in no way intends to pay for our wall. Trump, fortunately, has some other suggestions.
According to Fortune, the wall that Trump plans on building on the border is going to cost somewhere in the neighborhood of $15B, much more than he had originally predicted.
That is an additional cost that the taxpayers of America simply cannot bear, so Trump has to make this work. But with the Mexican President refusing to cooperate, how is he going to do it.
Trump has suggested that we institute a 20% tax on all goods coming into America from Mexico. While that doesn’t seem like a lot, let’s look at how the math shakes out.
U.S. goods and services trade with Mexico totaled an estimated $583.6 billion in 2015. Exports were $267.2 billion; imports were $316.4 billion. The U.S. goods and services trade deficit with Mexico was -$49.2 billion in 2015.
Mexico is currently our 3rd largest goods trading partner with $531 billion in total (two way) goods trade during 2015. Goods exports totaled $236 billion; goods imports totaled $295 billion. The U.S. goods trade deficit with Mexico was $58 billion in 2015.
If we taxed just imported goods, we would be getting 20% of around $295B. If we did this for just one year, we would make a total of $59B, or enough to build almost 4 walls!
How amazing is that! It wouldn’t even have to last the entirety of his Presidency and it would be over and done with. Let’s hope he decides to go this route.
How Trump’s plan to pay for Mexico border wall would work
The White House said Congress’ tax overhaul would place a 20 percent tax on imports from any country enjoying a trade surplus with the United States. In other words, countries selling more goods and service to the U.S. than buying from it. The idea is to rebalance the playing field for U.S. companies by discouraging Americans from importing.
WHAT OTHER WAYS COULD TRUMP GET MEXICO TO PAY?
During the campaign, Trump floated a number of possibilities without committing to any in particular.
He proposed changing a rule under the USA Patriot Act to block some of the roughly $25 billion in remittances that Mexicans living in the U.S. send home each year. He said he would refuse to free up the money until Mexico agrees to pay the U.S. between $5 billion and $10 billion.
Opponents of that plan say Mexicans in the U.S. would likely find other ways to send money back. They could take cash with them when traveling, wire money to a non-Mexican bank or use off-the-books transfers that are difficult to police.
Trump also suggested increasing visa fees for Mexicans to raise money, or canceling business and tourist visas issued to Mexicans until their country pays for the wall.
How Trump’s plan to pay for Mexico border wall would work
Trump signed an order Wednesday for work to begin on building a wall along the 2,000-mile (3,200-kilometer) border.
But the US leader has struggled to articulate how the wall will be paid for, though he has suggested recently that the United States would fund it first and Mexico would reimburse the cost later.
During the campaign, Trump threatened to tap into remittances that Mexican migrants send home, which last year amounted to $25 billion.
Trump has also ordered officials to scour US government departments and agencies in search of “direct and indirect” aid or assistance to the Mexican government and report back within 30 days.
Republican leaders announced Thursday they would try to carve out $12-15 billion worth of US taxpayer money for the project.