News site of the year

World
  1. Home
  2. World

Border wall will be funded by 20 per cent import tax on Mexican goods: White House

  • 15 reading now

Mexico City: Mexican President Enrique Pena Nieto on Thursday called off a trip to Washington, after US President Donald Trump launched his plan to construct a border wall and insisted he would make Mexico pay.

The incident opened one of the most serious rifts in memory between the United States and its southern neighbour.

Up Next

We want freedom

null
Video duration
01:21

More World News Videos

null
Video duration
01:33

Trump: meeting Mexico would be 'fruitless'
null
Video duration
01:21

We want freedom
null
Video duration
00:57

Dogs love music too
null
Video duration
01:01

Trump: Most Presidential person ever
null
Video duration
00:45

Doomsday Clock ticks closer to midnight
More videos

Trump: meeting Mexico would be 'fruitless'

US President Donald Trump says he and Mexico's president Enrique Pena Nieto 'agreed to cancel' their scheduled meeting next week, saying it would have been 'fruitless' if Mexico will not agree to treat America with respect.

Trump spokesman Sean Spicer added a stunning new detail about the proposed wall project later on Thursday, saying the President intended to pay for it by imposing a 20 per cent tax on all imports from Mexico.

Spicer later told reporters that it was just one proposal, USA Today reported, adding that White House Chief of Staff Reince Priebus said it was part of a "buffet of options".

Related Content

Mr Pena Nieto had been scheduled to meet Mr Trump on Tuesday to discuss immigration, trade and drug-war co-operation.

He called off the visit after Mr Trump tweeted that it would be "better to cancel the upcoming meeting" if Mexico was unwilling to pay for the wall.

Advertisement

Mexico's peso reversed gains immediately after Mr Trump's message on Twitter.

Mr Trump's moves have rekindled old resentments in Mexico, a country that during its history has often felt bullied and threatened by its wealthier, more powerful neighbour.

The legacy of heavy-handed US behaviour - which includes invasions and the seizure of significant Mexican lands - has mostly been played down by a generation of Mexican leaders who have pursued pragmatic policies and mutual economic interests with both Republican and Democratic US administrations.

Both Mr Pena Nieto and Spicer said that their countries were interested in maintaining positive relations. 

"We will keep the lines of communication open," Spicer told reporters in Washington on Thursday morning, adding that the White House would "look for a date to schedule something in the future". 

The Mexican President 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 Mr Trump moved to turn his campaign promises into reality.

Mexicans view a wall across the 3000-kilometre border as a symbolic affront, part of a package of Trump policies that could cause the country serious 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 neighbours to mushroom. 

Every day, $US1.4 billion ($1.85 billion) in goods cross the US-Mexico border, and millions of jobs are linked to trade on both sides. 

Mexico is the second largest customer for American-made products in the world, and 80 per cent of Mexican exports - cars, flat screen TVs, avocados - are sold to the United States.

"When we are talking about building a wall, about deporting migrants, about eliminating sanctuary cities [for migrants], about threatening to end a free trade agreement, or to take away factories, we are really talking about causing human suffering," Margarita Zavala, a possible candidate for the presidency in 2018 and the wife of former president Felipe Calderon, said in an interview. 

"And after today, without a doubt, it is very difficult to negotiate from behind a wall."

Mexicans had trouble recalling a time when relations were this bad with the United States or when an American president appeared to be such a threat to Mexico's core interests.

"Never," former president Vicente Fox said in an interview, when asked if Mexico had faced a comparable US president in his lifetime.

"And I never thought the US people would go for a president like this. "We don't want the ugly American, which Trump represents: that imperial gringo that used to invade our country, that used to send the Marines, that used to put and take away presidents most everywhere in the world," Mr Fox added. 

"That happened in the 20th century and this is what this guy is menacing us with."

Mr Trump, for his part, blamed the Mexicans for damaging the relationship.

Addressing a Republican policy retreat in Philadelphia, Mr Trump said on Thursday afternoon, "The President of Mexico and myself have agreed to cancel our planned meeting.

"Unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless," he added.

It was not clear exactly how the Trump administration would impose the new tax on Mexican exports. But Spicer said it would be part of a broader plan to tax imports from countries with which the United States has a trade deficit, such as Mexico.

"If you tax that $US50 billion at 20 per cent of imports - which is, by the way, a practice that 160 other countries do - right now our country's policy is to tax exports and let imports flow freely in, which is ridiculous," Spicer told reporters. 

"By doing it that we can do $US10 billion a year and easily pay for the wall just through that mechanism alone. That's really going to provide the funding."

Mr Pena Nieto's decision to cancel the trip came a day after Mr Trump signed an executive order to construct the wall, one of his signature promises and a rallying cry for his supporters during last year's presidential campaign. 

Mr Trump has insisted that Mexico will fund it, but Mr Pena Nieto and other Mexican officials have angrily denied they will do so.

The timing of the order was seen as further insult: Mexico's Foreign Minister Luis Videgaray was flying to Washington on Tuesday when news broke about Mr Trump's impending border wall announcement. 

All of Wednesday, speculation was rampant that Mr Pena Nieto might cancel his upcoming trip.

In the meantime, at the White House, Mr Videgaray met Craig Deare, who is in charge of Latin America on the US National Security Council.

Throughout Mr Trump's rise, Mr Pena Nieto has been mostly respectful towards him, even inviting him to visit Mexico City as a candidate last August. 

Mr Pena Nieto has tried to maintain a diplomatic approach to the new administration, suggesting that Mexico could negotiate with its largest trading partner and preserve good relations.

On Wednesday night, Mr Pena Nieto sent out a recorded message saying that he "regrets and disapproves" of the US decision to move forward with the wall. 

He repeated that Mexico would not pay for the wall but he still planned to come to Washington to meet Mr Trump because of the importance of the negotiations.

But that decision changed after Mr Trump's tweet on Thursday morning.

"This morning we informed the White House that I will not attend the work meeting planned for next Tuesday with the POTUS [President of the United States]," Mr Pena Nieto said on Twitter.

"Mexico reiterates its willingness to work with the United States to reach accords that favour both nations."

During a speech at a Republican policy retreat later in the day in Philadelphia, Mr Trump described NAFTA as a "terrible deal, a total disaster for the United States", and said that the move of manufacturing to Mexico cost millions of American jobs and the closure of "thousands and thousands of plants" across the US.

Congress moving ahead

On Thursday, leaders of the Republican-controlled US Congress said they planned to move ahead on funding the wall, which they projected would cost between $US12 billion and $US15 billion ($16 billion to $20 billion).

"So we intend to address the wall issue ourselves and the President can deal with his relations with other countries," Senate Majority Leader Mitch McConnell said at a news conference in Philadelphia, where Republicans were holding a retreat.

Mr Trump was due to address the group later in the day, as was British Prime Minister Theresa May.

House of Representatives Speaker Paul Ryan, when asked if legislators were worried about the US relationship with Mexico, said, "I think we'll be fine."

"We anticipate a supplemental [budget] coming from the administration," Mr Ryan said at a news conference.

"The point is we're going to finance the Secure Fence Act."

Mr Trump has also threatened to penalise US companies that use Mexican manufacturing plants to produce goods for the United States.

Former Mexican foreign minister Jorge Castaneda said his government should have cancelled the planned summit earlier in the week when it became clear that Mr Trump was going to go ahead with measures to build the wall and clamp down on immigration.

"There is an atmosphere of crisis in the United States and it is going to last a long time. We are going to have to get used to living like this," he said on Mexican radio.

Washington Post, Reuters

Related Content