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Trump mulls 20% tax on imported Mexican goods to finance wall

White House press secretary Sean Spicer had said the proposed tax would raise $10 billion a year, 'easily pay for the wall'. Big retailers like Walmart are fiercely opposed to the idea because it would push up the cost of their imported products. Photograph: (Getty)

AFP Washington, United States Jan 26, 2017, 11.02 PM (IST)

The Donald Trump administration thought about levying a 20 per cent tax on goods imported from Mexico to finance the wall that will be built along the border, before backtracking on the idea saying it is one of the many ideas being mulled.

White House press secretary Sean Spicer had said the proposed tax would raise $10 billion a year which would "easily pay for the wall".

Any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad,' Senator Lindsay Graham tweeted
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But minutes later, the Trump administration rowed back on the idea amidst a fierce blowblack from politicians and the retail industry.

"When you look at tariffs and repercussions you get from countries that you use your tariffs against, there is always the potential response for retaliation, which normally doesn't support good economic growth," said Republican Congressman Mark Meadows.

Senator Lindsay Graham was a little more colourful.

"Any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad," he tweeted.

The idea is also fiercely opposed by big retailers like Walmart who would see the cost of their imported products go up.

And any such tariff would likely prompt legal action and retaliatory measures from Europe or others at the World Trade Organization.

If implemented, the latest plan of action is set to deepen the mistrust between the Trump administration and the Mexican government, and comes hours after President Enrique Pena Nieto on Thursday called off a visit to Washington set for next week.

While Mexico has refused point-blank to bankroll the wall, the Trump administration is adamant that Washington's southern neighbour will pay for the wall.

Trump Wednesday (January 25) insisted that Mexico will pay for the wall, telling ABC they would be reimbursed "absolutely 100 per cent".

"Ultimately it will come out of what's happening with Mexico, we're going to be starting those negotiations relatively soon. And we will be, in a form, reimbursed by Mexico," Trump had said in an interview to the ABC network.

On Wednesday, Trump signed an executive order telling officials to begin to "plan, design and construct a physical wall" along the 2,000-mile (3,200-kilometer) US-Mexico border, sticking to his controversial campaign pledge.

Trump's project is aimed at clamping down on illegal immigration from Mexico. 

Trump says the wall would cost $8 billion, but other estimates suggest that it will cost almost double that amount.

"A nation without borders is not a nation," Trump had said Wednesday as he visited the Department of Homeland Security to sign two executive orders.

The building of the wall has split opinions in the US. Forty seven per cent of the people support the move while 45 per cent are against it, according to Morning Consult/Politico poll released on Wednesday, underscoring the controversial nature of the decision.

(WION with inputs from AFP)

 

 

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