Posted on 01/26/2017 1:12:48 PM PST by reaganaut1
PHILADELPHIA — President Trump plans to make Mexico pay for his border wall by imposing a 20 percent tax on all imports into the United States from Mexico, raising billions of dollars that would cover the cost of the new barrier.
The proposal, which Sean Spicer, the White House press secretary, said the president discussed privately with congressional Republicans before giving remarks at a party retreat here, would be a major new economic proposal that could have far-reaching implications for consumers, manufacturers and relations between the two governments.
Mr. Spicer said the 20 percent tax on annual Mexican imports would raise $10 billion a year and would easily pay for a border wall that is estimated to cost between $8 billion and $20 billion. The value of imported goods from Mexico in 2015 was $296 billion. Mr. Spicer said taxing imports is something that 160 other countries already do.
The new tax would be imposed on Mexico as part of a tax overhaul that Mr. Trump intends to pursue with the Republican Congress. Mr. Spicer said the tax initially would apply only to Mexico, but that the president supports imposing a 20 percent tax on all imports.
(Excerpt) Read more at nytimes.com ...
In business, which government knows nothing about, it is called negotiating. You start high and negotiate down where you want to be or as a ploy to get something else.
The primary reason for a tariff is that it enables the exploitation of the domestic consumer by a process indistinguishable from sheer robbery.<\I>
~ Albert Jay Nock
You can have an increase in prices due to factors other than an increase in the money supply. You can have crop failures, you can have buying competition from developing nations, you can have gov’t regulations that drive up costs.
But for a true inflation you need an increase in the money supply without any growth in the economy. That’s the monetary phenomenon.
In the 1970s regulation and taxes kept the economy from growing- it stagnated- the production possibility frontier curve couldn’t shift to the right- so every time that the Fed tried to gun the economy by increasing the money supply, “stimulating demand”, the only effect was inflation. Stagflation.
Economists such as Paul Craig Roberts suggested that the solution would be to increase supply. Shift the supply curve to the right. That way when you stimulated demand you would get economic growth instead of inflation. Reagan and his team bought into this. So did some Democrat Senators but no one remembers this.
So regulations were dramatically cut (Trump is doing the same), marginal tax rates were cut, investment tax credits were offered, investment write-offs were accelerated, energy production was encouraged. These shifted the supply curve to the right.
Volcker at the Fed all the while had choked off the growth of money and credit and interest rates went through the roof. When demand picked up the economy grew and inflation collapsed. And Reaganomics succeeded in its goal.
Hey guys. Export a car to Mexico and think going duty 20% ,VAT is 16%.
Think that may change is Donald starts his plan?
Slap a 25% surcharge on all cash remittances to Mexico. That alone will finance the wall AND make coming to America too unprofitable to consider.
This is most likely a negotiating strategy and/or test case. Trump likes to push the envelope and negotiate from a position of strength. He needs to talk with Mexico about the wall and nafta.
Look what he’s doing with China. He’s defending the SC sea islands and talking to Taiwan. He doesn’t actually need to do that, but if he wants to equalize things with China, he needs a better starting point.
Trump is more of an Art of War guy. He didn’t want to come out with the ideologically predictable approach (avoiding protectionism) because he knows that he will cede ground if he does what his opponent thinks he will do.
No, it will make staying in Mexico too unprofitable to consider. All the people now living in Mexico off remittances from relatives in the U.S. will run across the border.
Trump is feeding Mexico chicken shit and eventually they will love the taste of chicken liver.
Unmitigated ignorance, this is.
Reagan agreed to what he agreed to on amnesty because the other side promised to seal the border. Bashing Reagan only means you have no knowledge of history or you're a leftist.
Just fine.
1) Other nations will compensate
2) We get energy from Me-hee-co that we can substitute for.
Doubt there is much else they make that we have to have. We’ll live.
True, but only if Americans buy products from Mexico.
The tariff will increase the cost which means people will buy less.
This will hurt the Mexican economy.
Mexico will need to negotiate. At some point they will need to call their citizens home, and they will pay one way or another for a stronger border.
Every job repatriated will create 2 or 3 service jobs. As domestic supply increase competition will make prices go down. the amount of durable goods they can by for their dollar will make it back to pre tariff levels. it is win-win-win.
The artificial increase in prices when a tariff is first put into place is the beginning of the story and not the end of it. At first prices will increase because there is not a domestic supply(yet) to meet demand. But that is the point. Behind the tariff domestic supplier will reap huge profits which incentivizes other domestic sources to come on line. Eventually the domestic supply will meet demand and all will once gain have to compete with each other lowering the price. This makes greed work for the American worker instead of against the American worker.
No.
All comparable American made products will go up in price as well. Raising prices so the domestic producers can make more profit is the whole point behind an import tariff. It's basically just a wealth transfer from American consumers to American producers.
20% more for a car means less to spend on other things.
It will have no effect on other areas.
Except the ones that see reduced spending.
Every job repatriated will create 2 or 3 service jobs.
And every job lost due to higher prices will cost other jobs.
As domestic supply increase competition will make prices go down. the amount of durable goods they can by for their dollar will make it back to pre tariff levels.
Perhaps.
it is win-win-win.
Actually, it is win-win-loss.
i think who pays for the wall is irrelevant. I think the wall itself is irrelevant.
What is important is the political will to expel those who are here illegally and prevent those who would be here illegally from coming here.
The savings in welfare, education, healthcare, and other costs associated with these people would quickly outweigh the cost of 10 walls.
I’m all for catch and release. Catch here - release there.
Right. Because American suppliers would never use this as an opportunity to increase their prices while their competitors are being forced to take an involuntary 20% price increase.
I'm waiting for someone to tell me we need higher prices for the children.
The import tax will not raise American’s prices.
The 100 other taxes we pay raise American’s prices. Why are people blind to see 100 other taxes, but this one is to blame?
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