Mexico and the US; Distant Allies?

A major international disagreement has just occurred between the United States and its southern neighbor, Mexico. The Trump administration pushed forward with its major campaign promise for a border wall. President Trump has insisted that Mexico will indeed pay for this wall, on certain occasions such as a US tax on imports of roughly 20%.

The President of Mexico, Enrique Pena Nieto called off his upcoming trip to Washington to meet with President Trump. He stressed that Mexico will not pay for a US wall. White House Press Secretary Sean Spicer told reporters that the tax was “one idea” to pay for the wall. Let us imagine that the US did impose a 20% tax on Mexico to pay for the wall, this could present legal conflicts with NAFTA as trade between the two nations must remain free. Critics quickly pointed out that if such a tax were to be imposed, the US taxpayer would ultimately bare the cost of the wall.

Mexico’s Economy Secretary Ildefonso Guajardo said that Mexico is prepared to “mirror” any action by the US to raise tariffs, and also said it’d be best for Mexico to walk away from NAFTA sparking trade war rumors with our third largest trading partner.

President Pena Nieto has come under heavy criticism from his own citizens for being too soft on Trump, so it appears as of now this rhetoric is to boost his favorability in Mexico as both countries agreed they want to keep a close relationship.  Mexico isn’t the only country that President Trump has worried for an impending trade war; countries that were a part of the TPP deal are also worried that the new US President will impose heavy taxes on them as well, with Japan fearing a flashback to the 80’s.

If Mexico does not pay for the wall, President Trump will have to find a way to convince the American taxpayer to pay for the wall. 

Featured Image via Flickr/Gage Skidmore