YOUNGSTOWN, Ohio (WKBN) – We know President Donald Trump plans to build a wall along the U.S.-Mexico border, but he also has a proposed plan to pay for that wall.
Trump signed an executive order Wednesday directing the construction of the wall to keep illegal immigrants out. Republican leaders said it could cost up to $15 billion to put up.
A 20 percent tax on goods from Mexico could be the answer to funding it — a plan the White House announced aboard Air Force One Thursday afternoon.
“Fifty billion dollars at 20 percent of imports, which is, by the way, a practice that 160 other countries do,” House Press Secretary Sean Spicer said. “Right now, our policy is to tax exports and let imports flow freely in, which is ridiculous. But by doing it that way, we can do $10 billion a year and easily pay for the wall.”
Dr. Tod Porter, Chair of Economics at Youngstown State, said the plan to tax some imports by 20 percent could hurt American companies, especially while they try to adjust their supply chains.
He said a heavy tax could spark a trade war that would hurt U.S. industries that rely on exports, like the airplane industry and the agricultural sector.
“What happens to prices to consumers? Are you going to see prices rise as the cost of imported goods goes up?”
Mexico is one of America’s biggest trade partners. The U.S. is the number one buyer from that country, accounting for about 80 percent of Mexican exports.
Spicer later downplayed the idea, saying it’s just one of many being considered.
Porter added it’s hard for economists to predict how the administration’s policies will impact the economy because there have been no firm policies to analyze yet.
Valley residents have mixed feelings about the wall and the proposed import tax.
“I personally think it’s a good idea. It’s going to stop all of the illegal people coming in,” Amber Thornsberry said.
Not everyone had such a favorable opinion.
“We can come up with a better way than just throwing up a wall, taxing them, making them pay for it. I don’t think they are going to be too happy with us,” Dominic Felleti said.
Others feel it may not be a good idea to get into a trade war with Mexico.
“While he does have all three branches of government on his political party’s side, I don’t know that everybody necessarily thinks it’s a good idea to create a tariff war with a country that is on our southern border,” James Canacci said.
The U.S. and Mexico do about $1.6 billion in business a day in cross-border trade. Any tax would likely be passed on to American consumers with higher costs for goods.
A proposed tax would still need approval from Congress.