The Trump administration floated a 20 percent tax on imports from Mexico to pay for a wall along the southern U.S. border, a plan revealed hours after Mexican President President Enrique Pena Nieto canceled a meeting with Trump.
“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico, if you tax that $50 billion at 20 percent of imports,” White House Press Secretary Sean Spicer said. “By doing that we can do $10 billion a year and easily pay for the wall just through that mechanism alone. “
Spicer spoke to reporters aboard Air Force One as President Donald Trump returned from a speech to a congressional Republican retreat in Philadelphia on Thursday. Spicer didn’t explain how such a tax would work or how it would affect U.S. consumers and companies. Asked if the tax could be applied to other countries, Spicer said the administration is “focused on Mexico right now.”
Later, Spicer summoned reporters to his office and said the tax was only one idea to finance the wall, and that its economic impact would have to be examined.
The conflict between Trump and Mexico escalated over a 24-hour period after Trump signed a directive Wednesday to initiate the process of building the border wall. Trump’s border plan rapidly exploded into a showdown that threatens one of the world’s biggest bilateral trading relationships.
The cross-border sparring prompted a drop in the Mexican peso, which fell 0.7 percent to trade at 21.2149 per U.S. dollar following Pena Nieto’s announcement. Mexico’s currency has plunged almost 14 percent since Trump’s election on concern that Trump will renegotiate or scrap the North American Free Trade Agreement.
After Pena Nieto said in an address Wednesday that his country would refuse to pay for a barrier on the U.S….