However, it is presently unclear if it is a 20% import tax on all countries goods coming into the U.S. or just regarding Mexico. Also, the U.S. biggest trading partner I believe right now is Mexico. Trump's policies are going to bankrupt the poor in this country because everything might cost 20% more because of this tariff. So, likely bankrupting the poor is what he has in mind? (in order to create middle Class jobs here in the U.S.?)
Trump's tariff idea hits a wall
begin quote from:
Uproar in Congress after White House suggests a 20% tax on Mexican imports to pay for wall
Trump floats 20% tax on Mexican imports to pay for wall, but considering other options
(CNN)The
White House on Thursday said President Donald Trump is considering a
20% tax on imports from Mexico to pay for a southern border wall, but
that the President is still weighing other options.
White
House press secretary Sean Spicer told reporters on Air Force One
Thursday that Trump was backing the proposal and had just discussed it
with congressional Republicans in a private meeting.
Hours
later, amid an uproar from lawmakers on both sides of the aisle, Spicer
said that he was simply putting forward one idea Trump is considering
to show how the administration could fund the multibillion-dollar
construction of a wall on the US's southern border. Spicer repeatedly
said the White House was aiming to be "illustrative" rather than
"prescriptive" as he walked back the more definitive comments he made
earlier Thursday.
"Part
of our goal today was to demonstrate that there is an easy way -- or
several ways -- tone is to generate the reviews because the cost of the
wall in the big picture is really not that significant," he said.
"Imports (are) one way. I just want to be clear that we're not being
prescriptive in saying that is the only way nor is the rate
prescriptive."
White
House chief of staff Reince Priebus also told reporters the White House
is considering a "buffet of options" as it considers how to pay for the
border wall.
Peña Nieto Meeting canceled
The
discussion over an import tax to pay for the project comes after
Mexican President Enrique Peña Nieto canceled a planned meeting with
Trump after the US president signed an executive order Wednesday kicking
off the process of building the border wall and vowed once again to
force Mexico to pay for it -- something Mexico has adamantly rejected.
Spicer
also said Thursday evening that revenue from a tax on Mexican imports
or other revenue streams that didn't involve a direct payment from the
Mexican government would fulfill Trump's campaign pledge to compel
Mexico to pay for the border wall.
The
White House press secretary rebuffed questions from reporters about the
impact of a 20% tax on imports from Mexico on American consumers,
insisting such criticism was "short-sighted." Businesses that
manufacture US consumer goods in Mexico would inevitably pass on an
import tax to American consumers, who could see the price of many goods
soar.
Spicer first said Thursday
that Trump was on board with a plan by congressional Republicans to tax
imports from Mexico as part of broader comprehensive tax reform
legislation to help pay for the border wall.
"By
doing it that way we can do $10 billion a year and easily pay for the
wall just through that mechanism alone. That's really going to provide
the funding," Spicer had said, referring to a 20% tax. According to the
Office of the US Trade Representative, Mexico's exports to the US in
2015 was valued at $316.4 billion. The trade deficit is estimated to be
$50 billion.
That
alternative route appears to be lodged in raising a massive import tax
on goods exported from Mexico to the US -- a tax that could cause the
price of US consumer goods produced in Mexico to skyrocket.
Despite
the controversial nature of the proposal, which is likely to be met by
stiff opposition from business leaders in the US, Spicer said the
proposal is one "we've been in close contact with both houses (of
Congress) in moving forward and creating a plan."
"It clearly provides the funding and does so in a way that the American taxpayer is wholly respected," Spicer said Thursday.
Spicer
dodged reporters' questions about the impact of the border tax on
American consumers, instead stressing the tax's benefits for American
workers.
"I'm not going to get into
it," he added when pressed about businesses that manufacture goods in
Mexico passing along the tax to American consumers.
Hill Republicans react
Several
Republicans expressed concern about Trump's growing feud with Mexico,
worried that the new President is starting a trade war with one of the
country's most significant trading partners -- and could drive up the
debt in the process.
GOP officials
are particularly worried about effectively closing off the border with
one of the country's largest trading partners, while alienating Hispanic
voters in the process.
"Many unanswered questions about proposed "border adjustment" tax," tweeted Sen. John Cornyn, R-Texas, said.
Sen. Lindsey Graham, R-South
Carolina tweeted: "Border security yes, tariffs no. Mexico is 3rd
largest trading partner. Any tariff we can levy they can levy. Huge
barrier to econ growth. Simply put, any policy proposal which drives up
costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho
Sad."
Sen. John McCain, R-Arizona also expressed concerns about NAFTA.
"While
renegotiations could help to strengthen and modernize NAFTA to benefit
American businesses and consumers, any effort to restrict or impose new
barriers on our ability to trade with Mexico and Canada could jeopardize
the future of this trade agreement and have serious consequences for
Arizona and the country," McCain said in a statement.
House
Freedom Caucus Chairman Mark Meadows, asked about Trump's proposed tax
on Mexican imports to pay for the border wall, didn't embrace the idea.
"Generally
speaking I'm not in support of tariffs and taxes. At the same time I
don't want to hamstring the administration," Meadows said. "Obviously we
are going to look at a number of ideas to make sure that our border is
secure -- at the same time throwing out an idea and necessarily settling
on that are two different things."
Meadows added: "As a matter of general principle I'm not for tariffs."
"There's
always the potential for retaliation which normally doesn't support
good economic growth of either country," Meadows said.
Ohio
Republican Rep Jim Jordan, a leading House conservative, asked about
offsetting the cost of the border wall, said before he decided if he
could vote for the proposal from the Trump administration, said it was
important to consider the impact on the deficit.
Also,
Republicans are expressing deep concern about Trump's threats to pull
out of NAFTA, urging him to mend the relationship with Mexico.
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