Merely six days into his presidency, Donald Trump is hashing out plans to bring a major campaign promise to fruition. Unfortunately, the means for which the great border wall will be built, go be dependent upon the increasing costs of your favorite groceries.
Trump has continued to maintain that no matter what, Mexico will foot the bill for the border wall. Unfortunately, the president of Mexico, Enrique Peña Nieto has disagreed. Now, claims have been made by Trump stating that while the taxpayers will fund the project initially, Mexico will reimburse them for their money. How?
Well, since Mexico is refusing to directly foot the bill. Trump intends on taxing all Mexican imports by 20%. “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,” stated White House press secretary Sean Spencer during an interview on Air Force One, Thursday.
Of course, if this tax is added to Mexican imports, the price of such goods will increase. In turn, the added tax will eventually come out of your pocket, in the form of your weekly grocery bill. Each and every time a tax has been added or increased on imported goods, the result is always the same. To make things worse, in order for American markets to stay competitive, the price of non-imported goods will also go up. All of Mexico’s top imports include Corona, tequila, avocados, equipment, gems, precious metals, and furniture will all raise in price.
This isn’t the first time a president has raised import tariffs either. President Obama imposed a tariff on Chinese tires during the years 2009-2012.
“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.’”
Unfortunately, we can expect American markets to take a hit as well because citizens in Mexico will likely boycott our companies that lie within their borders. And it is likely that in turn, Mexico will increase tariffs on American imported goods. What will follow will be a nasty trade war that will not only raise tensions between the two nations but will also hurt the citizens living in both.