Tensions between the United States and Mexico continue to rise after President Enrique Peña Nieto called off his meeting with President Donald Trump. In response, the White House announced its plans of placing a new 20 percent tax on imports coming from Mexico in order to fund the creation of the border wall.
Peña Nieto took to Twitter on Thursday, saying that he had already informed the White House about his decision of cancelling the meeting that was initially scheduled for Tuesday. “Mexico reiterates its willingness to work with the US to achieve agreements which benefit both nations,” he said.
According to The Guardian, the implementation of such import tax proposal would further put the US-Mexico relations in crisis. During the presidential election campaign, Trump called Mexicans “rapists” and asserted that their southern neighbor should finance the wall. White House press secretary Sean Spicer announced such import tax proposal as Trump returned from Philadelphia’s congressional Republican retreat.
“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,” Spicer said. He mentioned how the country is allowing imports to flow in while exports are being taxed, referring to such as “ridiculous.” “If you tax that $50bn at 20 percent of imports – which is by the way a practice that 160 other countries do… By doing it that way we can do $10bn a year and easily pay for the wall just through that mechanism alone,” he added.
Meanwhile, chief of staff Reince Priebus called Trump’s import tax proposal as only one of a “buffet of options.” The tax increases would still go through Congress, although the president holds the power in certain circumstances to enforce import tariffs if he perceives threats against the country’s threats.
If the import tax proposal is approved, such action will bring on adverse effects on Mexico; their economy has become profoundly intertwined with that of the U.S. following the North American Free Trade Agreement (NAFTA) in 1994. Mexico also remains as U.S.’ third-largest trading partner when it comes to goods, with $531 billion worth of goods exchanged between the two nations in 2015.
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