Your tequila and avocados may be about to get more expensive.
Hours after Mexico’s president canceled a meeting with President Donald Trump, White House Press Secretary Sean Spicer announced a possible proposal to impose a 20 percent tariff on all goods imported from Mexico to pay for a wall along America’s southern border.
The plan Spicer lays out is sure to further strain relationships between the United States and Mexico and put the future of the North American Free Trade Agreement, NAFTA, in question.
According to Spicer, who previously served as spokesman for the Office of the U.S. Trade Representative (USTR), the tariff would generate $10 billion per year in federal revenue, which would swiftly pay back the $8 billion to $20 billion needed to construct the roughly 1,300-mile U.S.–Mexico border wall, the construction of which Trump ordered on Wednesday.
Congress would have to pass legislation to impose the tax, and Spicer tells NBC News reporter Peter Alexander that the tariff is not an official policy proposal but one of the options Trump’s administration is considering. Spicer’s softening stance on the potential proposal signals an uncertainty with how the Trump administration plans to pay for the border wall’s construction, a cost that will be fronted by federal funds.
BREAKING: Spicer tells me 20% tax on Mexican imports is NOT a policy proposal, but example of options how to pay for wall.
— Peter Alexander (@PeterAlexander) January 26, 2017
“The goal today is not to be prescriptive, it’s to basically say here’s a way in which the wall can be paid for extremely easy,” Spicer told Alexander.
Mexico is the third-largest goods trading partner with the U.S., which imported $295 billion in goods from Mexico in 2015, according to USTR. Mexico is also the second-largest importer of U.S. goods, having purchased $236 billion in American-made goods in 2015. U.S. imports from Mexico cover a wide swath of categories, including vehicles, machinery, televisions, beer, and vegetables, just to name a few.
While the details of the possible proposal remain uncertain, now might be a good time to stock up on Mexican Coke before it costs an arm and a leg.
H/T Washington Post