Here’s how President Donald Trump could force Mexico to pay for the border wall
Jan 25, 2017, 12:37 PM | Updated: Jan 26, 2017, 11:27 am
(AP Photo/J. Scott Applewhite, Pool, File)
PHOENIX — President Donald Trump on Wednesday signed an executive order to build a wall on the United States-Mexico border, part of which would run through Arizona.
While the politics of the wall are certainly an issue, a main tenet of Trump’s campaign was the promise that Mexico — not the U.S. — would pay for the wall’s construction. Mexico has said no.
“We will be, in a form, reimbursed by Mexico … absolutely, 100 percent,” Trump told ABC News’ David Muir.
Trump has altered his promise, instead saying the wall would be built using American tax dollars that would eventually be reimbursed by Mexico, though it is unclear how that would happen.
The numbers behind the wall are daunting: Trump estimated construction of the border wall will cost about $12 billion, although some experts have said the price tag could reach well past $38 billion.
So how would Trump, in theory, force Mexico to pay for a wall it has said it would not fund?
There are several possible means — all would depend on new trade agreements or revamped legislation or policies instead of demanding the Mexican government write a very, very large check.
Renegotiating the North American Free Trade Act is arguably the simplest and most likely way to use Mexican money to refund taxpayers.
Trump has been critical of the 23-year-old deal that represents an annual average of $531 billion in trade since the beginning of his presidential campaign.
“We will either renegotiate it or we will break it,” Trump said in September 2015 of the agreement between the U.S., Canada and Mexico, panning it as “a disaster.”
“Every agreement has an end,” he said. “Every agreement has to be fair.”
Trump’s pick for commerce secretary, billionaire Wilbur Ross, has said restructuring NAFTA will be a priority in the early days of the administration.
“NAFTA is logically the first thing for us to deal with,” he said. “We must solidify relationships in the best way we can in our own territory before we go off to other jurisdictions.”
Exactly how a new NAFTA or similar deal would fund the wall is unclear, but Trump has promised that he will not approve any partnerships that don’t favor American interests.
Trump is set to meet with Mexican President Enrique Pena Nieto next week. Mexican officials have reportedly said they are prepared to walk away from NAFTA if the deal becomes too one-sided.
Trump has already shown a willingness to revoke previous trade deals in his short presidency. Earlier this week, he signed an executive order pulling the United States out of the sweeping Trans-Pacific Partnership.
Rather than seeking a new version of NAFTA — or should a new one fail to address the wall — Trump could specifically target remittances, or money sent back to a nation (in this case, Mexico) by both legal and illegal immigrants.
In 2015, about $25 billion was sent to Mexico from the United States. A plan on Trump’s campaign website indicates he would charge a tax or fee on that money to pay for the wall. However, Trump would offer to remove the tax or fee if Mexico would pay for the wall’s construction.
That would put Mexico between a rock and a hard place. The nation would have to decide between reduced remittances because of the tax — remittances account for about 2 percent of the nation’s GDP — or write a check for billions to the United States.
Some politicians, such as former President Barack Obama, feel Trump’s plan is not feasible.
“The notion that we’re going to track every Western Union bit of money that’s being sent to Mexico, you know, good luck with that,” Obama told reporters at a press conference when he was still in the White House.
Trump’s plan for only taxing money sent to Mexico may be possible. Western Union, one of the main channels for remittances, has a fee program for any money sent to Mexico. But there is no indication how his administration would monitor money sent by other means, such as from one bank account to another.
His plan could struggle if money were sent from one bank account to another, something that would be far more difficult to track.
Another way Trump could pay for the border wall is the implementation of higher visa fees.
In the aforementioned plan on Trump’s campaign site, he says “a small increase in visa fees would pay for the wall.”
Visa fees start at $160 for entry into the United States. Considering more than 610,000 immigrant visas were approved in 2016, Trump’s math may add up. He has not given a specific dollar amount in regards to the potential fee hike.
Trump’s plan also called for bigger fees on border crossing cards. More than one million such cards are issued annually. The president has said the cards are “one of the greatest sources of illegal immigration into the United States via overstays.”
Trump’s plan also said he could use the threat of visa cancellations to force Mexico to pay for the wall, but did not expand much on that portion of his ideas.