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

Steph Willems
by Steph Willems

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]

Steph Willems
Steph Willems

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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.

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  • Rust-MyEnemy Whoa, what the hell is wrong with Jalop1991 and his condescension? It's as if he's employed by Big Plug-In or something."I've seen plenty of your types on the forums....."Dunno what that means, but I'm not dead keen on being regarded as "A type" by a complete stranger"" I'm guessing you've never actually calculated by hand the miles you've driven against the quantity of gas used--which is your actual miles per gallon."Guess again. Why the hell would you even say that? Yes, I worked it out. Fill-to-fill, based on gas station receipts. And it showed me that a Vauxhall Astra PHEV, starting out with a fully charged PHEV battery, in Hybrid mode, on my long (234-mile) daily motorway daily commute, never, over several months, ever matched or beat the economy of the regular hybrid Honda Civic that I ran for a similar amount of time (circa 5000 miles)."You don't use gasoline at all for 30-40 miles as you use exclusively battery power, then your vehicle is a pure hybrid. Over 234 miles, you will have used whatever gas the engine used for 200 of those miles."At least you're right on that. In hybrid mode, though, the Astra was using battery power when it wasn't at all appropriate. The petrol engine very rarely chimed in when battery power was on tap, and as a result, the EV-mode range quickly disappeared. The regular hybrid Civic, though, deployed its very small electric reserves (which are used up quickly but restore themselves promptly), much more wisely. Such as when on a trailing throttle or on a downward grade, or when in stop-start traffic. As a result, at the end of my 234 miles, the Civic had used less gas than the Astra. Moreover, I hadn't had to pay for the electricity in its battery.I look forward to you arguing that what actually happened isn't what actually happened, but I was there and you were not."Regardless, that you don't understand it appears not to have stopped you from pontificating on it. Please, do us all a favor--don't vote."You really are quite unpleasant, aren't you. But thanks for the advice.
  • Tassos Jong-iL Electric vehicles are mandated by 2020 in One Korea. We are ahead of the time.
  • 1995_SC Can you still get some of the tax credits under the new program?
  • Analoggrotto HyundaiGenesisKia saw this coming a long time ago and are poised for hybrid and plug-in hybrid segment leadership:[list=1][*] The most extensive range of hybrids[/*][*]Highest hybrid sales proportion over any other model [/*][*]Best YouTube reviews [/*][*]Highest number of consumer reports best picks [/*][*]Class leading ATPs among all hybrid vehicles and PHEVs enjoy segment bearing eATPs[/*][/list=1]While some brands like Toyota have invested and wasted untold fortunes into full range electric lineups HyundaiKiaGenesis has taken the right approach here.
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