Newly elected President Donald Trump wants to tax Mexican imports 20 percent to pay for his proposed wall.
Sounds simple enough, but it ignores a few very important facts.
First, Mexico’s main exports to the United States include vegetables, wine, beer, fruit, chocolate, cars, crude petroleum, video displays, computers and trucks.
The “tax” is not paid for by Mexico, it’s paid for by YOU when you purchase any of these products. Mexico is not paying for the wall. YOU are, with 20 percent tax at a time.
If the Mexican version of these products become too expensive, there are hundreds of other countries willing to fill the need at costs much lower than can be produced in the United States, meaning we generate no “tax” from Mexican products that are prohibitively expensive, and no new American jobs are created.
Second, the United States exports to Mexico machinery, electrical machinery, vehicles, mineral fuels, plastics, corn, soybeans, dairy products, pork and pork products and beef & beef products.
Also, we have a trade SURPLUS on “services” to Mexico. Things like travel, transportation and intellectual property (computer software). If you believe Mexico would not impose the exact same tax/tariff on U.S. goods, I have a wall to sell you.
Could YOUR business absorb a 20 percent penalty to continue doing business in Mexico?
Think some may cut back or close up shop altogether?
According to the Department of Commerce, U.S. exports of goods and services to Mexico supported an estimated 1.1 million jobs in 2014 (latest data available). Nine-hundred-fifty-three-thousand supported by goods exports and 193,000 supported by services exports. (All data gathered from the Office of the United States Trade Representative)
AND, let’s not forget that the flow of immigrants from Mexico took a sharp turn UP when the Mexican economy went down the drain and people were willing to risk their lives in order to eat or stay warm. That same flow of immigrants went DOWN when the U.S. economy hit a bump and the Mexican economy rebounded.
In other words, if Mexicans can earn a living in Mexico, they have little incentive to sneak into the United States.
Nothing about Trump’s proposal strengthens America, creates or saves jobs and carried to its logical conclusion, it could lead to more people attempting to enter the United States illegally.
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