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Mexico rift intensifying

Officials and pundits sound off on Trump plans for wall, import tax

By: Eric Kulisch
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Photo: 360b/Shutterstock
   Mexican officials and pundits have pushed back strongly against President Donald Trump’s stated plan to build a border wall and proposal to tax Mexican exports to the United States to compensate for job losses.
   Trump administration officials said last week they may consider a tax of as much as 20 percent on imports from Mexico to support growth in the U.S. manufacturing sector, though White House Press Secretary Sean Spicer said it was a potential option and not a formal plan.
   Trump and several aides muddied the political waters by making reference to a broad-based import tax being considered by Congress as part of a tax reform package that has nothing specifically to do with Mexico.
   Economists have said such a plan would increase the cost of consumer goods, increases that would likely be passed on to U.S. consumers. But such a plan also might be hit by import substitution from other markets.
   “Some U.S. consumers will say, ‘Well with a 20 percent increase because of the tariff, I’m no longer going to buy this car or this TV set from Mexico,’” Mauro Guillen, global economics professor at the University of Pennsylvania, said on the Public Broadcasting System’s “Nightly Business Report.” “But there’s no guarantee that that somewhere else is going to be a U.S. producer. It could be a Chinese company or it could be a South Korean firm. So the effects of this kind of across the board tariff would be so complicated that I don’t know if anybody can say today what they would be.”
   At a White House press conference Friday with British Prime Minister Theresa May, the first foreign leader to visit Washington since the new administration took power, Trump said he wanted to develop a relationship with Mexico that was more fair when it comes to trade.
   “The United States cannot continue to lose vast amounts of business, vast amounts of companies and millions and millions of people losing their jobs,” he said. “That won’t happen with me. We’re no longer going to be the country that doesn’t know what it’s doing.
   “Mexico has out-negotiated us and beat us to a pulp through our past leaders. They’ve made us look foolish. We have a trade deficit of $60 billion with Mexico. On top of that, the border is soft and weak, drugs are pouring in. And I’m not going to let that happen.”
   But Trump, in an interview with the Christian Broadcasting Network, said imposing a 20 percent tax on imports from Mexico is an option being considered as talks with the Mexican government continue.

Well, it’s something that I have the right to do. It’s something I can impose if I want.

   “Well, it’s something that I have the right to do,” he said. “It’s something I can impose if I want.”
   Asked if American consumers would get stuck with the bill, he said, “I think that some of it may get passed along, but it also creates jobs.”
   Trump has justified the tough talk with Mexico by saying he is following through on a campaign promise to build a wall to stop what he has described as a flood of illegal immigrants from Mexico that are causing crime and taking jobs from Americans. He also threatened to impose tariffs of up to 35 percent on imports from U.S. manufacturers that have opted to build factories in Mexico instead of producing goods in the United States.
   Meanwhile, the spat with Mexico, which is a close ally and the third largest trading partner of the United States, has stirred up anti-American sentiments in Mexico that have helped boost popular support for Mexican President Enrique Peña Nieto, who until last week had extremely low approval ratings.
   Mexicans have reacted negatively to Trump’s attempt to strong-arm the nation into following U.S. demands, which brings back historical memories of U.S. efforts in the 19th century to infringe on Mexican sovereignty. Social media posts are spreading in Mexico with suggestions of boycotts of U.S. companies.
   Mexican senator Armando Rios Piter, interviewed on MSNBC, talked about the need to prepare for retaliation, including “not buying any more corn” from states in the Great Plains and instead buying from other sources such as Brazil and Argentina. He also said Mexico might be forced not to cooperate with U.S. law enforcement officials on anti-narcotics and anti-terrorism initiatives.
   Forcing a wall on Mexico would actually harm national security more than help, Thomas Friedman, a New York Times columnist and author of the best-selling book on globalization “The World is Flat,” said on NBC’s “Meet the Press” Sunday.
   “How many Americans know, does President Trump know, that if you fly into Mexico from Baghdad or from Damascus, your name pops up on Homeland Security?” he said. “Same as if you fly into Toronto. We actually have created a seamless North American security envelope. Now how are the Mexicans going to feel about keeping that going when we're building a high wall?”
   Trump is stirring up a hornet’s nest of potential trouble, Jorge Castaneda, a New York University professor and former Mexican foreign minister, said on Friday on MSNBC’s “MPT Daily” program.
   “He is immensely disliked in Mexico,” Casteneda said. “He has a disapproval rating in Mexico that is worse than Peña Nieto’s, which is not easy,” Castaneda said. “Trump is around 3 percent. People really hate him here. And Mexican national sentiment against an American bully is a very easy thing to awaken. A lot of us have worked very hard over the last 25 years to leave our Mexican resentments in the past. We don’t want that leftist, anti-American sentiment to spring again.
   “We want a strong nationalist sentiment in Mexico. Many people believe our economic and social policies have been too conservative over the past 20 years. That may be true, but this is playing with fire. What Trump is doing is not only risking awakening this sentiment in Mexico, but awakening instability in Mexico. The U.S. should count its blessings.”
   Asked what he would recommend as retaliatory steps Mexico could take to warn the Trump administration to back off, Castaneda said, “Cease communications between the existing security, military and drug enforcement people in Mexico and their Mexican counterparts. The Americans can stay here, but we won’t take their phone calls. If that doesn’t work, then I’d take half of the DEA agents and have them leave.
   “And if that doesn’t work, then we’ll start looking at the Central American immigrant situation on Mexico’s southern border, which we have been helping the U.S. on since July 2014. Frankly, I don’t see any reason why we should continue to do that. If the kids from El Salvador want to seek asylum in the U.S., let them do so.”
   The speed with which the rift between the neighboring nations has opened was exemplified Thursday, when Peña Nieto cancelled a scheduled visit to Washington to discuss trade and immigration after Trump signaled his administration will quickly begin work to construct a wall on the southern border and then seek reimbursement for it from Mexico through some undetermined mechanism.