Trump’s New Plan to Pay for the Border Wall: Make Your Groceries More Expensive

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money

by Nick Bernabe

Donald Trump’s campaign promise to build a ‘great wall’ on southern border and make Mexico pay for it has already unraveled — less than a week since the reality TV star-turned-political power broker took office.

Trump has rolled back his campaign rhetoric about making Mexico pay for his wall, with the president admitting U.S. taxpayers will pay for it initially but claiming Mexico will pay the U.S. back for construction costs. The only problem is that Mexico has repeatedly refused to pay for the wall, and with turmoil already at a fever-pitch south of the border, Mexico’s government would risk all out revolution if it were to agree to any terms in which Mexicans were forced to pay for it.

But The Donald has a plan, and it seems pretty simple: Since Mexico won’t pay for the wall directly, he’ll just add a 20 percent tax on their imports at the border. 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,” White House press secretary Sean Spicer told reporters on Air Force One on Thursday.

That sounds pretty great, right? U.S. taxpayers will get a free wall by forcing Mexicans to pay for it by charging them to import the goods Americans consume from Mexico. Many food products that people living in the U.S. enjoy — like fruits, vegetables, and avocados — could be taxed an extra 20 percent under Trump’s plan. Mexican beer like Corona? 20 percent. Tequila, too. Cars, electronic equipment, machines, engines, pumps, oil, medical and technical equipment, furniture, lighting, signs, plastics, gems, precious metals, coins, iron, and steel products are Mexico’s top imports, which could be taxed 20 percent more.

But here’s what Trump and his short-sighted plan to pay for this wall won’t tell you: Mexico isn’t going to pay that tax — you are. By collecting an extra 20 percent in taxes at the border, Trump is about to charge you more for groceries at the supermarket. This will happen because Mexican exporters will have to raise their prices to account for the new tax, then that added cost will be passed on to the consumer. It happens every time a tariff is imposed. Not only that, but even non-imported goods go up in price because there is less competition in the market.

Imposing import taxes, or tariffs, is not a new policy. In fact, Barack Obama imposed a 35 percent tariff on Chinese tires from 2009-2012. As noted by the right-leaning National Review:

“Obama’s move could be credited with saving or creating $48 million of additional worker income and purchasing power.

“But the tariff also forced consumers to spend $1.1 billion more on tires than they otherwise would have — or roughly $900,000 per U.S. tire industry job created. And retaliatory tariffs imposed by the Chinese further hurt our economy. In early 2010, China’s Ministry of Commerce imposed tariffs ranging from 50.3 to 105.4 percent on American poultry imports, which ‘reduced exports by $1 billion as U.S. poultry firms experienced a 90 percent collapse in their exports of chicken parts to China.’”

Trump’s tough talk against Mexico is having other unintended consequences, as well. U.S. companies operating in Mexico, like Ford, McDonald’s, Walmart, and Costco, are now facing boycott threats inside Mexico in retaliation against Trump’s anti-Mexico rhetoric.

Mexico, like China did under Obama, will respond to America’s tariffs with some of their own, hurting U.S. businesses whose products are exported south of the border. The resulting trade war will only drive up consumer prices for working class Americans and Mexicans while increasing tensions between the neighboring countries to levels not seen in many, many years.

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  • dav1bg

    So illegal Mexicans on welfare working for cash, getting $40K tax refunds, while 64% of our workforce unemployed and on welfare, is cheaper than putting these americans to work and getting them off welfare?
    Guess I’m just stupid.

    • Uncle Sham

      Unless your groceries consist entirely of avocados, corona, and tequila…I’ll think you’ll survive

  • Vows of Vengeance

    Ok, here’s the thing. The US can produce and make all of those things. Our country is littered with farmland just sitting and factories. Those products mentioned have been made in the usa once before. We are not at mexicos mercy. They would be forced to compete. They now drain us in welfare and make us pay to import into mexico. Usa has to pay OUT to all counties and no counties have to pay OUR county to import.

  • endofwatchersbegan1/28/2011

    Nick, DICK, whatever your name is. Take a flying leap over that wall when it is built. You, Billary, Bush and Barach are no longer welcome in America. Hit the road!

    • Lewie Paine

      ‘Tariff’ is a fancy name for ‘tax.’ Not everyone wants to pay higher taxes simply because a few sheep are afraid.

      • chivalry

        What taxes? If you believe mexico wont pay then invest in peso.

      • John C Carleton
        • Lewie Paine

          Thanks John. I’m still working my way through that other info you sent. Good stuff. Appreciate you sending it.

        • Lewie Paine

          “How to Overthrow the System: brew your own beer; kick in your TV; kill your own beef; build your own cabin and piss off the front porch whenever you bloody well feel like it.”
          -Edward Abbey

          • John C Carleton

            I still intend on finding that rural land. Got some good fences where i can piss about anywhere i want to on my place except the from pouch. Thats what i am going to have once i get that land. If i want to sit on the front porch in my fruit of the looms, pick my guitar and watch the chickens peck, no one to complain but the wife. Being female she would find something to complain about if i was dressed in a three piece suit and pissed off the porch.

  • Clementine

    And what is going to be done to stop the tunnels they already dig underground without the wall there?

    • My adoptive father began his 30 year career in the US Army (1933) stationed at Fort Brown Texas (now a campus of the University of Texas) shooting “wetbacks” as they tried to swim across the Rio Grande river – the US didn’t have nearly as bad of an illegal immigration problem then as it does now. Using the US census as a source, the ethnic composition of south Texas (Cameron, Hidalgo, Starr, and Willacy Counties, Texas) changed from 70% Anglo and 30% Hispanic in 1960 to 20% Anglo and 80% Hispanic by 1990 (primarily a result of illegal immigration). Any wall built shall need to be patrolled by the US military and lethal force used to maintain its integrity – illegal immigration (and smuggling) shall thus be reduced dramatically.

      • chaos theory

        Historical footnote. Eisenhower’s “Operation Wetback” running from 1954 to 1962 resulted in the deportation of ~1.5 M illegal Mexican immigrants. Most of the apprehensions took place in the first year. By the time Reagan signed the huge amnesty, the floodgates had been opened. The amnesty was sold to the American public as part of a fix that would be paired with enforcement of immigration laws already on the books but widely ignored. It was a political bait and switch.

  • Ingmar Blessing

    Things are not so simple. It depends on the relative price elasticity on a certain product. If the supply side on the market increases its prices more sharply than the demand side can reduce the volume, then the supply side wins and makes more money. That also counts when you replace a price increase with a tax increase on that product, because it has the same effect for the demand side.

    On the other hand it can be that the demand side wins when there is enough competition with homogeneous products to which consumers can switch. In this case the the price tag goes to the supplier. In terms of taxes: The producers in Mexico have to pay the bill and not the consumers in the US.

    Bottom line: It fully depends on the market situation if a tariff makes sense for a product or service. I’m sure they know that in the government, too.

    But In this specific case, an export tariff might be the solution: You put a 1% tax on all money transactions to Mexico. It’s small enough that they pay it and don’t look for alternatives, big enough to make sure the wall will be paid off in a few years and a side-effect would be that Mexican businesses keep their capital gains in the US, which means they get invested in the US and not Mexico or elsewhere.

  • Rebel w/out a Cause

    I like Igmar’s suggestion. Tax the millions of dollars that the illegals wire to their families in Mexico – or any other country. Use that money to pay for the wall. But Vows has a good point as well – all of the commodities mentioned can be grown or built in America. Just like they used to be before NAFTA and that “great sucking sound”.

    • Lewie Paine

      Taxation is theft.

      • ReverendDraco✓ᵛᵉʳᶦᶠᶦᵉᵈ ᵃᶜᶜᵒᵘᶰᵗ

        How about restitution?

        • Lewie Paine

          Been waiting on that a long time. Good thing I’m not holding my breath.

      • Mara natha

        Welfare (as it is used today) is also theft .

        • Lewie Paine

          No doubt. Corporate welfare dwarfs social welfare.

      • Rebel w/out a Cause

        Then pray tell, how do we pay for a government? Or are you an anarchist? And I don’t ask that question out of derision. But I suspect that if we DIDN’T have a government with a military for protection, someone would come in and GIVE us one…. Now – I tend to agree with you that at its current levels, tax IS theft, but what is the alternative? How would you fund the government? Your statement was a generalization and an oversimplification.

        • Lewie Paine

          …a generalization and an oversimplification.
          Yes, hard to provide details in this forum. The idea is to get people asking questions. A good question is, Is defense possible without the state?

          http://governmentdeniesknowledge.com/how-anarchy-works-security-without-the-state/

          • Rebel w/out a Cause

            I loved the quote from the Chinese guy at the top of the page. A perfect description of our current state, isn’t it? But as I read through the various opinion pieces, it occurred to me that a) anarchists are very optimistic about the character of people in general, and b) for the idea of anarchy to work, EVERYONE would have to buy into it. All of the 7.5+ billion people in the world. Otherwise, someone or some government is going to become aggressive, not “sympathetic”. And if liberals had their way, we’d all be disarmed and pretty much completely defenseless. Do I like the status quo? No, but I think anarchists idea of their perfect world is just as unrealistic as the utopia dreamed of by the communists. People are not naturally good and benevolent. Just the opposite.

            The people who ran the death camps during WW2 weren’t “evil” before the war. They were just people. Like you and me. They were just “doing their job”, and many of them were PROUD of the job they did. Before they got their jobs, they were “good” people, yet look what they were capable of. No – there is evil in all of us. To assume anarchy would work because people are “good”, would be a tragic mistake.

          • Lewie Paine

            You seem to be arguing slavery is the only practical solution. That one’s servitude should be voluntary as it’s man’s duty to obey external authority even though you know it’s immoral.

            I say ‘anarchism is not a romantic fable but the hardheaded realization, based on five thousand years of experience, that we cannot entrust the management of our lives to kings, priests, politicians, generals, and county commissioners.’

          • Rebel w/out a Cause

            WTF? Slavery? Is that what you got from my reply??

            Anarchism IS EXACTLY a romantic fable. If it isn’t kings, priests, politicians, generals, and county commissioners, it’s chiefs, tribal leaders, shamans, etc. Don’t kid yourself about the early civilizations. There have always been “leaders”. Most people – in every culture – look for leadership. Usually they succumb to the wrong leaders, but they still want leaders. “Sheep”, I think you called them. So be it. But I don’t think the human condition is conducive to your dream of total individualism, self-responsibility, and peace and harmony. Look around you! Half the citizens of this country rely on the government to survive. How exactly are you going to convert the sheep to your anarchistic way of thinking? Again – a romantic dream.

            My dream – soon to be realized – is to get off the grid, and live my own little version of anarchy. I have the resources, I have the location, and I have the means. But I have no illusions about converting others to my lifestyle. For the reasons I have outlined for you above.

            If you want to do his yourself, go ahead. But don’t criticize and condemn others for not doing it. Most have been conditioned to live the sheep lifestyle, and do not have the means or the resources to do anything else – even if they wanted to. So stop being so condescending, thank you.

          • Lewie Paine

            ‘How exactly are you going to convert the sheep to your anarchistic way of thinking? My dream – soon to be realized…’
            Maybe I converted you. Anarchy is about personal responsibility and self-governance. If you have the resources, the location, and the means, why not go for it? That’s what I did. Lived off the grid for years, worked hard under the table, beat the taxes, saved and invested and now I have a cabin on the grid just a few miles from the Continental Divide in CO. They get me for property taxes but that’s about it.

            Saving the world is only a hobby. Most of the time I do nothing.

          • Rebel w/out a Cause

            No, my friend You did nothing to convert me. I came to the realization years ago, and devised my own plan, which is now coming to fruition. I’m just sayin’ – your effort to “save the world” in your posts just sounds condescending. You wont convert too many people by sounding “holier than thou”… Why not go for it? I am. One step at a time. I had a family to care for. My kids are grown and gone. My wife passed away recently. I have legal and estate matters to finalize, and then I’m gone. Looking forward to actual freedom.

    • Mara natha

      Indeed, that tax is currently on the table . I believe it has been suggested that a 10% tax be assessed against all monies leaving America and entering Mexico, for example . This would also help to offset costs of the wall and in the end even help pay for perhaps the welfare many if not most of these people are receiving until we can get it eliminated .

  • Lewie Paine

    I have no desire to pay higher taxes as I’m on a fixed budget. The problem is the US welfare state. Of course people want to come and get something for nothing. Has anyone thought about turning off the spigot?

    And for those Americans who want the wall simply because they want to hide from the world – here’s a much cheaper solution…

    https://uploads.disquscdn.com/images/9e80cc9edff5320f9b4865e3ebbc2660fc5545a836f3b5b1cffa4004dcbfa890.gif

    • Rebel w/out a Cause

      I am on a fixed income as well. I DO want to protect or national sovereignty from foreign invasion. Haven’t you heard? Immigration is considered a weapon of war. Research it. And ask the EU how well it’s working out for them. I suspect the people in the photo are liberals who are overcome by white guilt and feel the need to ignore reality so they can feel better about themselves.

      • Lewie Paine

        After WWII the EU made the mistake of falling back into the socialist trap. The US thought they could somehow pursue socialism and be exempt from it’s pitfalls. Silly sheep. Now they think they can build a wall around their trough.

        • Fred Bastiat

          “Now they think they can build a wall around their trough.”

          Chuckle of the day. Sad, but oh so true.

    • JF1962

      I guess you don’t live in the Southwest. I’m in CA, we have millions of legal and illegals (mostly illegal) immigrants. They have overwhelmed the system
      I’m American of Mexican descent by the way.
      They eagerly take advantage of any public assistance they can.

      • Lewie Paine

        That’s understandable. The offer of ‘something for nothing’ is a powerful incentive. America has actively been pushing socialism and the welfare state for the past 100 years.

        As Ray said in the Field of Dreams, ‘Build it and they will come.’ But personally, I got no problem with anyone looking for honest work.

        Plus I see the border issue and the wall as two different issues. The wall will prove to be a pork barrel crony corporatist project. And the US could enforce the current laws if it chose to do so. Other countries do, and they don’t have the most powerful military on the planet.

        • John C Carleton

          The illegals are here because the federal government wanted them here, paid them to come, sit on their butts, live free, making babies as fast as they can with as many males as they can. End the freebies, only the ones who really want a job will come, bunch of them will head back to where they came from, where they have family they can sponge off of. Just need to end the freebies. Not saying i would do this, not saying it would be right. But you want to stop illegals from Mexico? Crew served machine gun positions set up with interlocking fields of fire down the whole border.. Give orders to fire on anything that crosses the line that walks on two legs.

          • Lewie Paine

            You’re right. Government encourages it. Most powerful military on the planet could stop it also. My bitch is with the taxpayer funded wall. A project that would almost certainly turnout like those last Republican no-bid contracts to Halliburton in Iraq. It’s never meant to keep anyone out, or even be completed. It’s just a excuse to transfer taxpayer dollars into the crony politicians’ accounts.

          • John C Carleton

            When china fell, the conquerors were not stopped by the wall. China was defeated because the government had become very corrupt. There are tunnels under walls all over the world. And yes, pork barrel politics and a placebo for the sheep.

  • Brian Superfly Disguise

    The other side, is that domestically grown produce and goods will be less expensive to consumers. Therefore it will increase American jobs, produce, and manufacturing.

    • Lewie Paine

      History shows protectionism does not work. It was a contributing factor to the Great Depression.

  • Mara natha

    I thought this as well when I first heard it and posted as such on another forum. I spent a great deal of time last night figuring out what was going on . The solution Trump wants to impose will indeed make Mexico , in the end, pay for the wall . It would take too long to explain here and I’m not really good at making it succinct . I’ll be brief and say that there are taxes you can apply to production and taxes you can place on consumption . Senator Ryan has proposed at least five ways in which we can get Mexico or any other country to start paying us back for the extreme deficits we are currently running regarding trade . It goes something like this , other countries do not tax their companies for producing products and shipping them overseas . We do not place any taxes on the companies prior to their product entering our country nor do we assess a VAT tax on goods prior to their sale within our country , as for instance Europe does . VAT tax means value added tax and is imposed on imported goods in Europe .

    However, America does place a production tax on goods made in America and then once American goods are shipped overseas an additional VAT tax is placed on them by foreign governments , making our products too costly and creating our deficit in trade . This has made international trade for America impossible . We simply can’t compete.

    There are several ways that we can remedy this problem . For instance the parts made for cars assembled in Mexico by American companies are made in America , but not taxed here prior to the companies sending them to the Mexican factory . We can tax the production cost of shipping those products /parts to Mexico and then we can add an import tariff , paid by the company prior to their entry into America , to offset the cost of the wall (as other countries already do). This will do two things . It will encourage American producers to build the product within America so that they do not incur an additional tax on parts , thereby keeping jobs in America and bringing our factories back AND until that happens all of the earned revenue , in one way or another , will be paid by Mexico (or companies operating in Mexico) and therefore pay for the wall.

    This double dipping on taxes that every other major country in the world currently uses against the United States must end . Once we start instituting the same policies that they use, our trade deficits will turn around which is why , among other reasons, China is running scared .

    There are several other ingenious ways that Ryan has articulated which we can use . Perhaps that’s why he was grinning so widely throughout the inaugural . It seems Obama was never interested in doing this . Nor were any other previous presidents , whether they were Democrat or Republican made no difference .

    Hope this helps.

  • Josh

    This should help US producers and national security at the same time, a win win. We get a nice wall to help reduce terrorists entering the country, and US farmers get a fair shake. That being said, we should withdraw US land and air forces from around the world and start placing them along the border. This will reduce costs of maintaining a military as well as create training opportunities, and bring terrorists trying to enter the country face to face with US forces. For once, US forces will actually be defending liberty and the American way of live rather than wall street interests.

  • I don’t hear any whining from the author about Chinas import tarrifs on US goods… over %22 in come cases…
    .
    Good news, if avocados from Mexico cost more, stores will simply source more produce from California. How exactly is that bad..?

    • ReverendDraco✓ᵛᵉʳᶦᶠᶦᵉᵈ ᵃᶜᶜᵒᵘᶰᵗ

      It’s bad because reasons, man!

      Don’t you know anything?

  • BeeTheChange

    Only $10 billion? Our imports from Mexico total about $250 billion annually. 20% of that is $50 billion. Maybe Donald’s real plan is to pocket the rest.

  • Emily Summer

    Whatever Mexico produces, we can produce here. I bought frozen strawberries that were grown in Mexico, processed in Canada and sold under the Safeway name. We grow tons of strawberries in this country. Why do I have to but Mexican tomatoes in the summer? We grow tons here.

    • SP_88

      There are all sorts of crazy things going on with our foreign trade policy. We produce many things here, then we export them to other countries. And when we need some of it, we import it from a foreign country.
      Meat, fish, produce, and all kinds of other things are imported instead of us consuming fresh meat and vegetables. It makes no sense whatsoever.
      But that’s what happens every day.
      It probably has something to do with money. Everything has something to do with money. Otherwise we would be doing it the smart way.

  • Jean

    IF stupid Americans would stop buying product from Mexico and buy from USA but they are to stupid and what cheap all the time, but what they don’t know is that the food they eat is laced with poisons toxins. Mexico doesn’t care about the American being poisoned anymore then they care about their own people. Wake UP!

  • Who Cares

    Been in a Mexican no-go zone in any of our cities lately? Whoever wrote this article hasn’t. How about the gang and cartel growth in most of our big cities? How about the fact that more that 80% of all violent crime in America is now committed by non-Whites? How about schools failing because the curriculum must be adjusted down to the lowest common denominator?
    The list could go on for pages, and those who have no skin in the game still wouldn’t care.
    BUILD THE WALL, BUILD IT YESTERDAY!

  • mayday911us.

    So I guess you have seen the price of food now It’s gone up a lot in 8 years under obozo. Yes It just wasn’t him but 70 80 dollars dose not go as far as it did.

    Well the tariff on company’s that make it their and bring it back here should be around 12% with no tax breaks.

    But all the foreign ad and the drug enforcement money stop to the country. With put a tax on the money that sent south of the border. Until they pay for the wall.

  • JF1962

    Agree with what you say, but nothing is getting cheaper. And foreign made items are junk.

  • Cinderella Man

    What the fukk ever!! Apply a surcharge to all the money the meheecans send back home BOOM…problem solved

  • Major Payne

    What about a entry fee for every ‘legal” that crosses the border, every time, And I guess they already fine the “illegals” (that’s if they have any money?)

  • stan

    In Georgia, they managed to chase off many of the immigrants, then found out that there was no one to pick the crops. They decided to give those jobs to parolees desperate for work. Most of them quit the first day; the ones who stuck around only picked 20% as much as the immigrants do. Americans don’t want these jobs no matter how desperate they are, and increased wages to harvesters means even higher grocery prices.