Pres­i­dent Trump’s claim that Mex­ico is pay­ing for a bor­der wall is non­sen­si­cal

The Washington Post Sunday - - POLITICS & THE NATION - [email protected]­post.com

“I would build a great wall, and no­body builds walls bet­ter than me, be­lieve me, and I’ll build them very in­ex­pen­sively, I will build a great, great wall on our south­ern bor­der. And I will have Mex­ico pay for that wall.”

— Don­ald Trump, in his pres­i­den­tial an­nounce­ment speech, June 16, 2015

“What we save on the USMCA — the new trade deal we have with Mex­ico and Canada — what we save on that, just with Mex­ico, will pay for the wall many times over just in a pe­riod of a year, two years and three years . . . . So I view that as, ab­so­lutely, Mex­ico is pay­ing for the wall.”

— Trump, dur­ing a news con­fer­ence, Jan. 4, 2019

Just about ev­ery pres­i­dent has made a cam­paign prom­ise that, once elected, he dis­cov­ers he can­not ful­fill.

Ge­orge H.W. Bush once pro­claimed, “Read my lips: No new taxes.” Barack Obama pledged that he would re­duce the an­nual cost of health-care pre­mi­ums by $2,500.

Taxes went up un­der Bush, and so did pre­mi­ums un­der Obama. Vot­ers never for­got it.

Bush made his tax pledge in his nom­i­na­tion ac­cep­tance speech. Obama at least 19 times promised to re­duce pre­mi­ums, ac­cord­ing to a video cir­cu­lated by Repub­li­cans.

Now Pres­i­dent Trump faces a sim­i­lar co­nun­drum: He promised that Mex­ico would pay for his plan to build a wall along the south­ern bor­der. But he did not make this prom­ise just once or even two dozen times. From his an­nounce­ment speech to the elec­tion, he de­clared 212 times that Mex­ico would pay for the wall, ac­cord­ing to the com­pre­hen­sive record of Trump’s speeches, in­ter­views and tweets main­tained by Factba.se. That works out to al­most ev­ery two days dur­ing the cam­paign.

Mex­ico re­fuses to pay for the wall, and Trump en­gi­neered a gov­ern­ment shut­down to try to force Con­gress to ap­pro­pri­ate the nec­es­sary funds. Yet he in­sists that Mex­ico is pay­ing for the wall be­cause of a re­work­ing of the North Amer­i­can Free Trade Agree­ment (NAFTA) that his ad­min­is­tra­tion ne­go­ti­ated — though it is not yet rat­i­fied by Con­gress.

This is a non­sense claim. When the pres­i­dent first raised it in mid-De­cem­ber, we asked both the U.S. Trade Rep­re­sen­ta­tive’s of­fice and the Coun­cil of Eco­nomic Ad­vis­ers for the eco­nomic anal­y­sis that jus­ti­fied his state­ment. The USTR would not re­spond to our queries, and the CEA said it was a mat­ter for the White House press of­fice. But the White House press of­fice de­clined to re­spond.

We ini­tially de­cided that this claim could be eas­ily han­dled in our data­base of Trump’s false and mis­lead­ing claims (which now to­tal 7,645). But now the pres­i­dent has as­serted it re­peat­edly in the last month, sug­gest­ing it is a state­ment on its way to be­com­ing a Bot­tom­less Pinoc­chio. So let’s fact-check it. But first, let’s re­view how the pres­i­dent made his case dur­ing the cam­paign.

The Facts

When Trump was running for pres­i­dent, he was un­equiv­o­cal: Mex­ico was pay­ing for the wall, and he would guar­an­tee it. He claimed that there were many ways the Mex­i­cans could be forced to pay for it and that they would be “very happy” to do it.

“Mex­ico will pay for the wall, okay? One way the other, there’s five dif­fer­ent ways they can pay.” — Jan. 20, 2016

“Lightweights come up to me, and they say you can’t get Mex­ico to pay for the wall. I said a hun­dred per­cent, not 99, I said a hun­dred per­cent.” — March 4

“Mex­ico will pay for the wall. They’ll be very happy to do it. Very happy to do it.” — Oct. 30

At one point, Trump was forced to re­lease a plan for mak­ing Mex­ico pay for it. He first gave it to The Wash­ing­ton Post. The ba­sic idea: He would threaten to cut off the flow of bil­lions of dol­lars that Mex­i­can im­mi­grants sent home un­less Mex­ico im­me­di­ately made a “one-time pay­ment” of $5 bil­lion to $10 bil­lion. He also sug­gested other in­tim­i­da­tion tac­tics, in­clud­ing in­creased trade tar­iffs, the can­cel­la­tion of visas and higher fees for bor­der-cross­ing cards.

But the idea im­me­di­ately came un­der attack for be­ing prob­a­bly il­le­gal and likely un­work­able. Trump never re­ally pressed the idea, though he would of­ten tell au­di­ences that he had re­leased a plan to force Mex­ico to pay for the wall.

Trump also promised to have Mex­ico pay for the wall in the “Con­tract with the Amer­i­can Voter,” re­leased with fan­fare on Oct. 22. 2016: The wall would be built “with the un­der­stand­ing that the coun­try of Mex­ico will be re­im­burs­ing the United States for the full cost of such wall,” said the doc­u­ment, which Trump signed.

Af­ter Trump took the oath of of­fice, how­ever, the prom­ise to make Mex­ico pay was qui­etly dropped. In his first con­ver­sa­tion with then-Mex­i­can Pres­i­dent En­rique Peña Ni­eto, on Jan. 27, 2017 — The Post ob­tained the tran­script — Trump ad­mit­ted that he had a po­lit­i­cal prob­lem of his own mak­ing. (Peña Ni­eto had can­celed a trip to Wash­ing­ton af­ter Trump had tweeted Jan. 26 that Mex­ico would pay for the wall.) He urged Peña Ni­eto not to make an is­sue of it.

“The fact is we are both in a lit­tle bit of a po­lit­i­cal bind be­cause I have to have Mex­ico pay for the wall — I have to,” Trump said. “I have been talk­ing about it for a two-year pe­riod.” He pleaded with the Mex­i­can pres­i­dent not to say that Mex­ico would not pay for it. “You can­not say that to the press. The press is go­ing to go with that, and I can­not live with that,” Trump said.

Peña Ni­eto replied that he was happy to avoid the sub­ject. “Let us for now stop talk­ing about the wall,” he said. “. . . Let us leave this topic — let us put it aside and let us find a cre­ative way of look­ing into this is­sue.”

Trump agreed that if re­porters asked about Mex­ico pay­ing for the wall, he would try to avoid the is­sue by say­ing he was try­ing to work some­thing out.

Af­ter that, Trump’s ref­er­ences to Mex­ico pay­ing for the wall dropped dra­mat­i­cally — fewer than 20 times over 23 months. It would come up from time to time, usu­ally if re­porters pressed him, but Trump would only vaguely ex­plain how it might happen.

“One way or the other Mex­ico is go­ing to pay for the wall. It may be through re­im­burse­ment, but one way or the other, Mex­ico will pay for the wall.” — Aug. 28, 2017

Dur­ing the cam­paign, Trump de­scribed get­ting money from Mex­ico for the wall and rene­go­ti­at­ing NAFTA as two dif­fer­ent tasks. But in early 2017, he sud­denly said in an in­ter­view with the Wall Street Jour­nal that they might be con­nected, as an “in­di­rect” pay­ment for the wall.

“They can pay for it through, as an ex­am­ple, they can pay for it in­di­rectly through NAFTA. OK? You know, we make a good deal on NAFTA. Say I’m go­ing to take a small per­cent­age of that money and it’s go­ing to go to­ward the wall. Guess what? Mex­ico’s pay­ing.” — Jan. 11, 2018

Even then, Trump sug­gested there was some sort of ac­count he would be build­ing through al­leged sav­ings on trade. But that did not make much sense, and he never re­ally pur­sued the idea again. Fi­nally, on Dec. 13, he tweeted: “I of­ten stated, ‘One way or the other, Mex­ico is go­ing to pay for the Wall.’ This has never changed. Our new deal with Mex­ico (and Canada), the USMCA, is so much bet­ter than the old, very costly & anti­USA NAFTA deal, that just by the money we save, MEX­ICO IS PAY­ING FOR THE WALL!”

No­tice how Trump keeps mov­ing the goal posts in a des­per­ate ef­fort to claim he’s keep­ing an un­work­able cam­paign prom­ise? Well, here’s why this lat­est claim is simply wrong.

First, he premised this on money that the United States “saves” on the trade agree­ment. He’s al­ready earned a Bot­tom­less Pinoc­chio for say­ing the United States “loses” money on trade deficits. That is simply false.

Coun­tries do not “lose” money on trade deficits. A trade deficit simply means that peo­ple in one coun­try are buy­ing more goods from an­other coun­try than peo­ple in the sec­ond coun­try are buy­ing from the first coun­try. Trade deficits are also af­fected by macroe­co­nomic fac­tors, such as cur­ren­cies, eco­nomic growth, and sav­ings and in­vest­ment rates. Trump’s deficit-fi­nanced tax cut and the Fed­eral Re­serve’s in­ter­est rate pol­icy helped boost the trade deficit in 2018.

So now he’s com­pound­ing one false­hood with an­other one.

It’s worth not­ing that the trade deficit with Mex­ico has been climb­ing dur­ing the Trump pres­i­dency, so by his own (non­sen­si­cal) math, he’s al­ready in deficit. Even if the trade deal re­sults in a smaller trade deficit be­cause Mex­ico is buy­ing more goods from the United States, it does not nec­es­sar­ily trans­late into greater rev­enue for the U.S. gov­ern­ment. NAFTA elim­i­nated tar­iffs be­tween Mex­ico and Canada, so there is no ad­di­tional rev­enue to earn by some­how caus­ing trade to in­crease with lower tar­iffs.

The new United StatesMex­ico-Canada Agree­ment (USMCA) is ac­tu­ally a mod­est up­dat­ing of the 25-year-old NAFTA. Some el­e­ments of the deal were bor­rowed from the Trans-Pa­cific Part­ner­ship, the trade deal Trump scrapped at the start of his term.

One key change con­cerns au­tos, and it might end up rais­ing prices for Amer­i­can con­sumers. Start­ing in 2020, to qual­ify for zero tar­iffs, a car or truck must have 75 per­cent of its com­po­nents man­u­fac­tured in Canada, Mex­ico or the United States, a sub­stan­tial boost from the current 62.5 per­cent re­quire­ment.

In the­ory, if au­tomak­ers do not meet the re­quire­ment, there will be tar­iffs on cars, which would in­crease rev­enue. But that means Trump’s pol­icy would have failed, be­cause the whole point was to en­cour­age more pro­duc­tion in the United States. More­over, the tar­iffs would es­sen­tially be a tax on Amer­i­can car buy­ers, who would pay higher prices.

There’s nothing in the agree­ment that ear­marks funds for the wall. And any rev­enue raised via tar­iffs (or some other source) still must be ap­pro­pri­ated by Con­gress, which thus far has re­fused to fund Trump’s wall.

Fi­nally, the agree­ment must still be rat­i­fied by leg­is­la­tors in the three coun­tries and would not take ef­fect un­til 2020 at the ear­li­est. Trump ap­peared to rec­og­nize that when he of­fered a slip­pery time­line in his Jan. 4 news con­fer­ence: “What we save on that, just with Mex­ico, will pay for the wall many times over just in a pe­riod of a year, two years and three years.”

But it’s still not true.

The Pinoc­chio Test

The pres­i­dent has al­ready earned a Bot­tom­less Pinoc­chio for claim­ing that the United States loses money on trade deficits. Now, he’s claim­ing that the “sav­ings” from his trade deal will pay for the bor­der wall.

Given that the trade deficit de­pends on fac­tors be­yond a pres­i­dent’s con­trol, this is yet an­other risky prom­ise to make. The trade deficit with Mex­ico climbed in 2018. It may climb again in 2019. But even if the trade deficit de­clined, that would not trans­late into gov­ern­ment rev­enue that could be claimed for the wall. Con­gress would still need to ap­pro­pri­ate the nec­es­sary funds.

It’s hard for any politi­cian to ad­mit they broke a cam­paign prom­ise. But no amount of spin­ning and fuzzy math will ob­scure the fact that Trump made a prom­ise that he can­not de­liver. If he keeps mak­ing this claim, he’ll end up with a Bot­tom­less Pinoc­chio — com­pounded.

GLENN KESSLER

The Fact Checker

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