Sun Sentinel Palm Beach Edition
Mexico relations going south
Pena Nieto scraps visit as Trump pushes border barrier, import tax
President Enrique Pena Nieto cancels his D.C. trip. He was expected to talk with Trump about the border wall.
MEXICO CITY — A deep rift opened Thursday between the United States and its southern neighbor as the Trump administration pressed forward with a plan for a border wall and insisted that Mexico would pay for it, possibly through a U.S. tax on imports.
President Enrique Pena Nieto on Thursday called off a trip to Washington after restating that Mexico would not finance the wall.
The plan for a border wall was a centerpiece of Donald Trump’s election campaign, though he never specified how Mexico would fund the project or how he would compel payments if Pena Nieto’s government refused.
The two leaders had been scheduled to discuss the matter Tuesday at the White House. But Pena Nieto took to Twitter on Thursday to say he had informed the White House he would not be coming.
In a speech later Thursday in Philadelphia, Trump cast the cancellation as a mutual decision. He said that “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. We have no choice.”
On the flight back to Washington, Trump’s spokesman told reporters the president was considering the 20 percent import tax to foot the bill, the most specific proposal Trump has ever floated for how to cover a project estimated to cost $12 billion to $15 billion.
“By doing that, we can do $10 billion a year and easily pay for the wall just through that mechanism alone,” White House press secretary Sean Spicer said. “This is something that we’ve been in close contact with both houses in moving forward and creating a plan.”
Spicer said Trump was looking at taxing imports on all countries the U.S. has trade deficits with, but he added, “Right now we are focused on Mexico.”
But the announcement sparked confusion across Washington, and the White House tried to backtrack.
During a hastily arranged briefing in the West Wing of the White House, chief of staff Reince Priebus said a 20 percent import tax was one idea in “a buffet of options” to pay for the border wall.
A 20 percent tariff would represent a huge tax increase on imports to the U.S., raising the likelihood of costs being passed on to consumers. Half of all nonagricultural goods enter the U.S. duty free, according to the office of the U.S. Trade Representative. The other half face import tariffs averaging 2 percent.
House GOP lawmakers and aides interpreted Spicer’s comments on a 20 percent border tax as an endorsement of a key plank of their own tax plan, which Speaker Paul Ryan has been working to sell to the president. The House GOP “border adjustability” approach would tax imports and exempt exports as a way of trying to help U.S. exporters and raise revenue.
Earlier this month, Trump called that concept confusing. And during the White House’s cleanup efforts Thursday, Spicer wouldn’t say whether Trump agreed with the border adjustment tax being considered by the House GOP.
The new president has previously raised the prospect of slapping tariffs on imports, but had not suggested it as a way to pay for the border wall.
Pena Nieto had been scheduled to meet with Trump to discuss immigration, trade and drug war cooperation.
Both Pena Nieto and Spicer said their countries were interested in maintaining positive relations.
“We will keep the lines of communication open,” Spicer told reporters in Washington, adding that the White House would “look for a date to schedule something in the future.”
Pena Nieto tweeted that his government was willing to work with the United States “to reach agreements that benefit both nations.”
But Mexicans expressed shock and dismay as Trump moved to turn his campaign promises into reality.
Mexicans view a wall across the 1,954-mile border as a symbolic affront, part of a package of Trump policies that could cause the country economic pain. They include a crackdown on illegal immigrants, who send billions of dollars home, and renegotiation of the North American Free Trade Agreement, or NAFTA.
The treaty has allowed trade between the neighbors to mushroom. Every day, goods valued at $1.4 billion cross the U.S.-Mexico border, and millions of jobs are linked to trade on both sides. Mexico is the world’s second-largest customer for U.S.-made products, and 80 percent of Mexican exports — automobiles, flat-screen TVs, avocados — are sold to the United States.
Mexicans said they had trouble recalling a time when relations were this bad with the United States.
“Never,” former president Vicente Fox said in an interview, when asked if Mexico had faced a comparable U.S. president in his lifetime. “And I never thought the U.S. people would go for a president like this.”