Trump Proposes 20 Percent Tax On Mexican Imports To Pay For Border Wall | KERA News

Trump Proposes 20 Percent Tax On Mexican Imports To Pay For Border Wall

Jan 26, 2017
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ROBERT SIEGEL, HOST:

More now on today's diplomatic dustup with Mexico. President Trump was supposed to host Mexican President Enrique Pena Nieto at the White House early next week. Now that meeting is off. And to explain why, NPR national political correspondent Mara Liasson joins us from the White House. Hiya.

MARA LIASSON, BYLINE: Hi, Robert.

SIEGEL: What's going on with the U.S. and Mexico, Mara?

LIASSON: Well, this was Donald Trump's first foray into international diplomacy, and it hasn't started out very well. The Mexican president says he canceled the meeting because he's angry that Donald Trump just this week announced his plans to build his long-promised wall with Mexico and insists that Mexico pay for it.

And Trump said today that they agreed mutually to cancel the meeting, and when he spoke to Republican lawmakers in Philadelphia as you just heard Scott talking about, he said unless Mexico treats the U.S. fairly and with respect, the meeting would be fruitless. So I guess the definition of treating U.S. - the U.S. fairly is paying for a wall on the U.S. side of the border, which Mexico says it will never do. And Trump in essence portrayed the U.S. as the victim of its poorer, smaller, less-powerful neighbor to the south.

SIEGEL: Well, today the Trump administration floated an idea of how a wall actually might get built and paid for. Can you tell us about that?

LIASSON: Yes, and this was really interesting. The White House press secretary said that Trump is considering an import tax from all goods imported from Mexico to the U.S. to pay for the wall. Now, this is already part of the House Republicans' comprehensive tax reform plan. They want to tax imports instead of exports. And Trump hinted at this idea when he talked to the Republican Congress members today.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: Well, we're working on a tax reform bill that will reduce our trade deficits, increase American exports and will generate revenue from Mexico that will pay for the wall if we decide to go that route.

LIASSON: So a border adjustment tax or a tax on imports, not exports, is like a tax on the trade deficit. It's something that over 160 countries already do, including Mexico. But it's something that just two weeks ago Trump criticized as being too complicated. Now it sounds like Trump is admitting that the Mexican government is not going to pay for the wall, and Paul Ryan's plan is a way to get himself out of that box. So score one for Paul Ryan and the Mexican government.

SIEGEL: Yeah. How exactly would this work? Would - I mean if Americans bought goods that had been taxed at the border coming in from Mexico, then American consumers would be paying more for the things that they're buying here.

LIASSON: Yes, presumably any company that produces something in Mexico and sends it to the U.S. would be subject to this tax, and they presumably would pass the cost of that onto the consumer. So yes, they - the consumers would probably bear the brunt of this tax. That is why so many interests in the United States' retailers, agriculture, oil refiners don't like this. And many Republican senators have a lot of questions about it. This is very preliminary. The White House is emphasizing that nothing is settled. This is one idea they're looking at.

SIEGEL: Yeah.

LIASSON: But if the president is looking for a creative way to fund the wall and if he admits that the Mexican government won't, this shows that he's flexible; he's a flexible negotiator even when he's negotiating with himself.

SIEGEL: (Laughter) But just to be clear, if in fact there were to be a new tax imposed at the border on things coming in from Mexico, that's not an executive action. That would have to be...

LIASSON: No, absolutely. That would...

SIEGEL: ...Part of a law passed by the Congress.

LIASSON: ...Need legislation. And that's why even though the House Republicans, Paul Ryan are gung ho about this, there are many Republican senators who are not crazy about it. And as I said, there are many, many companies and industries in the United States that don't want a border adjustment tax, don't want a tax on imports. But it's definitely part of the House comprehensive tax reform plan.

SIEGEL: OK. That's NPR's Mara Liasson at the White House. Thanks, Mara.

LIASSON: Thank you. Transcript provided by NPR, Copyright NPR.