Reports indicate that United States President Donald Trump is considering the idea of imposing a 20 per cent tax on Mexican imports to pay for his proposed wall along the border between the two countries. This proposal came after Mexican President Enrique Pena Nieto cancelled his official visit to the US after Trump doubled down on his bid to tear up the North American Free Trade Agreement and charge his southern neighbour to build the wall. Pena Nieto reiterated Mexico's stance against the move and the country's unwillingness to pay for its construction.
Although the Trump administration has argued that a 20 per cent import tax is only one of several options being considered to pay for the border wall—a promise central to his campaign message against the free flow of migrants from the south—it is an idea that stands on very shaky economic logic. The two nation's economies are deeply intertwined, especially in the border states. A 20 per cent tax on Mexican imports would mean the wall will be paid for mostly by US consumers, not Mexicans, something which the Trump administration has hesitated to state. Of course, the terms of NAFTA should be renegotiated, if the US President feels that it has been incredibly unfair to blue-collar American workers.
However, a set of trigger-happy fingers on his Twitter account is no way for the new US President to negotiate such a significant deal on NAFTA, or a border wall for that matter. After Trump's campaign vitriol against Mexican immigrants, calling them "rapists", it has become a point of national pride for the Mexican government to oppose any proposal associated with the wall. At this juncture, both nations are on the precipice of a trade war.