Trump Proposes 20-percent Tax on Mexican Goods to Pay for Wall; Other Countries Could Take a Hit

Steph Willems
by Steph Willems
trump proposes 20 percent tax on mexican goods to pay for wall other countries could

Consumer products and vehicles produced outside of the U.S. could see a big hike in sticker price if the Trump administration goes ahead with a proposed plan to tax Mexican goods — and eventually all foreign goods — to the tune of 20 percent.

The White House said today the measure is being looked at as part of a wide-ranging tax overhaul package under consideration by Congress. The announcement came after an anticipated visit by Mexican President Enrique Pena Nieto went south.

The meeting between Trump and Nieto, scheduled for next week, fell apart today, with the Mexican leader taking to Twitter to announce the update. Of course, Nieto’s tweet came after one fired off by Trump, where he said the meeting should probably not go ahead if Mexico isn’t willing to pay for the administration’s proposed border wall.

Earlier this week, Trump pulled the U.S. out of the fledgling Trans-Pacific Partnership and announced his intention to renegotiate the North American Free Trade Agreement. The president has clearly expressed his desire to reach bilateral deals with individual nations. Mexico sends 80 percent of its goods to the U.S.

“I’ve said many times that the American people will not pay for the wall,” Trump said after the visit’s cancellation. “Unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless and I want to go a different route.”

Yesterday, Trump signed an executive order to begin construction of the wall — a key election plank proposed as a method of stemming illegal immigration. Nieto tweeted that his country is still hoping to reach a trade agreements “that favor both nations.”

White House spokesman Sean Spicer said the import tax is one of a range of options for paying for the wall, and it could eventually be applied to other nations. He added the tax could be targeted at specific industries.

Even if the 20-percent import tax was only applied to Mexican-made goods, it would still cause a shakeup in automakers’ production plans. Car manufacturers, both domestic and foreign, move production of low-profit vehicles south of the border to avoid the expense of opening costly assembly American plants to serve the U.S. market. Earlier this week, Trump proposed decreasing corporate tax rates to between 15 and 20 percent.

While Mexico and other countries stare down the barrel of a serious economic disruption, Canada, on the other hand, could make out like a bandit — assuming that country’s free-trade agreement with the U.S. stays intact.

After Trump pledged to reopen NAFTA, the head of his business advisory panel said that Canada shouldn’t worry about collateral damage.

“Canada is very well-positioned for any discussions with the United States,” said Stephen Schwarzman, adding that the U.S. holds its northern neighbor in “very high regard.” Canada sends 75 percent of its goods to the U.S., including vehicles produced by the Detroit Three, Honda and Toyota.

[Source: Reuters, Business Insider]

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  • TOTitan TOTitan on Jan 27, 2017

    CallMeDick Trump just makes up shit as he goes along and and expects people to believe him. Apparently you are one of them

  • Vvk Vvk on Jan 27, 2017

    I used to buy MANN filters for most of my cars. A couple of year ago I installed a MANN air filter in my car and was very surprised to see that it did not fit quite right. Checking it over, I was further surprised that the filter was no longer Made in Germany. It was now Made in Mexico. What do I care where it is made, as long as it is made well, right? Being Made in Mexico did not make the price go down, by the way, not one penny. Well, I thought, it is still MANN, one crooked filter does not mean anything. Next time my Made in Mexico air filter did not fit right again. This time I was furious. I no longer buy MANN filters. Hengst filters I now buy are perfectly made and don't cost more than MANN filters. Made in Germany/Austria... I hope they do impose the 20% tax so that MANN filters come from Germany again.

  • MaintenanceCosts Despite my hostile comments above I really can't wait to see a video of one of these at the strip. A production car running mid-eights is just bats. I just hope that at least one owner lets it happen, rather than offloading the car from the trailer straight into a helium-filled bag that goes into a dark secured warehouse until Barrett-Jackson 2056.
  • Schurkey Decades later, I'm still peeved that Honda failed to recall and repair the seat belts in my '80 Civic. Well-known issue with the retractors failing to retract.Honda cut a deal with the NHTSA at that time, to put a "lifetime warranty" on FUTURE seat belts, in return for not having to deal with the existing problems.Dirtbags all around. Customers screwed, corporation and Government moves on.
  • Bullnuke An acquaintance of mine 50+ years ago who was attending MIT (until General Hershey's folks sent him his "Greetings" letter) converted an Austin Mini from its staid 4 cylinder to an electric motored fuel cell vehicle. It was done as a project during his progression toward a Master Degree in Electrical Engineering. He told me it worked pretty well but wasn't something to use as a daily driver given the technology and availability of suitable components of the time. Fueling LH2 and LOX was somewhat problematic. Upon completion he removed his fuel cell and equipment and, for another project, reinstalled the 4 banger but reassembled it without mechanical fasteners using an experimental epoxy adhesive instead which, he said, worked much better and was a daily driver...for awhile. He went on to be an enlisted Reactor Operator on a submarine for a few years.
  • Ajla $100k is walking around money but this is almost certainly the last Dodge V8 vehicle and it's likely to be the most powerful factory-installed and warrantied pushrod engine ever. So there is some historical applicability to things even if you have an otherwise low opinion of the Challenger.And, like I said up thread, if you still hate it will be gone soon anyway.
  • Carlson Fan GM completely blew the marketing of the Volt. The commercials were terrible. You'd swear they told the advertising company to come up with an ad that would make sure no one went out and shopped a Volt after seeing it!...........LOL My buddy asked why I bought a car that only goes 40 miles on a charge? That pretty much sums up how confusing and uninformative the advertising was.