Trump plans 20 percent Mexico tax
January 27, 2017
Mexican President Enrique Peña Nieto canceled his planned trip to Washington next week to consult with President Donald Trump as Trump's spokesman announced that Trump plans to pay for a new southern border wall with a 20 percent tax on all goods imported from Mexico, The Washington Post reported.
That would presumably apply to agricultural products, including fruits and vegetables that are staples in U.S. grocery stores.
The Agriculture Department's Foreign Agricultural Service website notes, "Under the North American Free Trade Agreement (NAFTA), Mexico and the United States have eliminated all tariffs and quantitative restrictions on agricultural goods and have strengthened scientific ties to eradicate diseases and pests, conduct research and enhance conservation."
Trump this week signed an executive order indicating his intent to cancel NAFTA and negotiate bilateral trade agreements with Mexico and Canada.
“If you tax that $50 billion at 20 percent of imports
— which is by the way a practice that 160 other countries do
— right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous. By doing it that we can do $10 billion a year and easily pay for the wall just through that mechanism alone.” Sean Spicer, White House press secretary
Trump spoke to a Republican congressional policy retreat in Philadelphia today.
"The president of Mexico and myself have agreed to cancel our planned meeting" next Tuesday, Trump said. "Unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless."
The Post said it is not clear how the Trump administration would impose a new tax on Mexican exports. But spokesman Sean Spicer said it would be part of a broader plan to tax imports from countries with which the United States has a trade deficit, like Mexico.
"If you tax that $50 billion at 20 percent of imports — which is by the way a practice that 160 other countries do — right now our country's policy is to tax exports and let imports flow freely in, which is ridiculous," Spicer told reporters. "By doing it that 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."
United Fresh Produce Association President and CEO Tom Stenzel said, "It is very troubling for world food and agricultural markets for administration spokespersons to bandy about terms like a 20 percent tax on all imports from Mexico or other countries."
"The United States both exports and imports a very large amount of foods and agricultural products, and is dependent on fair and open markets," Stenzel said. "The U.S. has laws and trade agreements in place that do not allow any administration to unilaterally start adding these types of tariffs.
"But, if the administration does choose to renegotiate trade agreements and ask Congress to work toward imposing such a tariff on foods, we risk provoking a trade war that would harm both American agricultural producers and consumers. Consider the impact on American consumers of a 20 percent hike in the cost of foods such as bananas, mangoes and other products that we simply can't grow in the United States. And, consider what other countries would do to block U.S. exports in retaliation.
"As the administration looks to incentivize manufacturing jobs in the U.S., we urge President Trump to consider the unique nature of food and not place a new 'food tax' on American consumers," Stenzel said.
Trump signed executive orders Thursday directing the Homeland Security Department to build a wall on the border with Mexico and to toughen immigration enforcement. Nieto said Mexico would not pay for the wall, and at first aides said he was considering not traveling to Washington for the meeting. Today Trump tweeted he was considering canceling the meeting and Nieto then canceled his trip.
Meanwhile, California Gov. Jerry Brown, a Democrat, said his state would defend undocumented immigrants, and mayors across the country said they would contest Trump's plan to stop federal grants to cities that harbor undocumented residents.
In his state-of-the-state speech this week, Brown said, "Let me be clear: We will defend everybody — every man, woman and child — who has come here for a better life and has contributed to the well-being of our state."
Mayors in New York, Los Angeles, Seattle and other places said they would not go along with Trump's tough stance on immigration and that his order to make sanctuary cities ineligible for federal grants is unconstitutional.
The United Farm Workers asked who will perform all kinds of jobs in the United States if Trump actually follows through on his proposals.
United Farm Workers President Arturo Rodriguez issued the following statement in response to Trump's executive orders:
"U.S. Department of Labor surveys show the majority of U.S. farm workers are undocumented. The United Farm Workers' anecdotal experience in California and other states where we are active shows the percentage of undocumented workers is even higher.
"So if today's executive orders from Donald Trump signal the beginning of fulfilling his oft-repeated campaign pledge to deport the undocumented, then who is going to feed America? Who is going to feed the guests at Trump hotels and golf courses? Who is going to feed Donald Trump?"
–The Hagstrom Report