A White House proposal to impose a 20 percent tariff on Mexican imports could be "mucho" painful for your wallet.
President Donald J. Trump is pushing forward with his campaign promise to build a wall on the Mexican border — a highly contentious effort to thwart illegal immigrants from getting into the United States. But the Trump administration’s proposal to implement a 20 percent tax on goods imported from Mexico to help pay for the wall could hit Americans where it hurts most: In the pocketbook.
Mexico is America’s third-largest goods trading partner, according to the U.S. Trade Representative. In 2015, the U.S. imported $295 billion in goods from its southern neighbor.
Although a 20 percent tariff on goods Mexico sends to America would likely raise enough money for the massive wall, “American companies and consumers would bear the brunt of such a tariff,” says CNN Money, noting that American companies forced to pay the tariff on the Mexican goods would ultimately pass on the price increase to consumers.
Edward Alden, a trade expert at the Council on Foreign Relations, tells CNN Money:
“The notion that a 20 percent tariff is a way of forcing Mexico to pay for the wall, it’s just a falsehood. It’s a way of forcing American consumers to pay for the wall.”
A 20 percent tax on goods from our southern neighbor means you’ll likely be paying a lot more for the following heavily imported items:
- Fresh fruits and vegetables
- Snack foods
- Wine and beer
- Processed fruits and vegetables
Sen. Lindsey Graham (R-S.C.), wrote in a recent tweet:
Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea.
American companies also import massive amounts of machinery, electrical machinery, mineral fuels, and optical and medical instruments from Mexico. So you would likely feel the pinch of a 20 percent tariff on imports from Mexico in broader ways than a spike in your grocery bill.
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