President Trump said a lot of things over the past couple of years. He made a lot of claims and assertions – some of which he has backed off on recently. For example – it doesn’t appear that we will be seeing Hillary behind bars anytime soon as Trump described during a debate. It also doesn’t appear he has the desire to deport all 11 million (more like north of 20 million, in my opinion) illegal aliens.
While I don’t necessarily agree, I understand why he would just want to move on, rather than rehash old claims. And who knows – maybe he’ll get to them in good time.
But one thing he hasn’t backed off of is his desire to build a wall on the Southern Border and have Mexico pay for it. At the time, no one knew what his method for extracting the estimated $12-$15 billion out of Mexico was going to be. I’m sure some thought that he would insist that Mexico just cut a check or something.
Now we know that President Trump’s plan is to attach a tariff of up to 20% for all goods imported from Mexico to the United States. This, my friends, is some bad juju.
For what is a tariff? Simply put, it is just a tax. And a tax that Mexico will not pay. Sure, if it comes to fruition, the spin will be that Mexico is paying the tariff, but that’s not the way it works. Countries don’t pay taxes or tariffs. Companies and individuals do.
And it won’t be Mexican companies or Mexican citizens who will be paying an additional 20%, or 15%, or whatever the finally number is. It is the American citizen, the American consumer, who be fitting the bill for the wall.
I’m 100% for the construction of the wall. I’m also 100% comfortable, as I’m sure are many millions of my fellow citizens, with us paying for it. And it’s funny that some are all of a sudden apoplectic over the cost. Even if it’s $50 billion, which it how much it will end up being – mark my words, I would still have no problem with it. The people complaining about the cost and where we will get the money are the same people who evidently have no problem with Chuck Schumer’s proposed $1 trillion infrastructure bill. And wouldn’t the wall be considered infrastructure? And will the tariff be lifted when the magic number is reached? Just asking, but I digress.
If this tariff ever does get implemented, here is what will actually happen. I know, because this is the way it always goes.
The tariff will be attached to goods coming in from Mexico, and just like any other tax or fee incurred by a corporation, will be added by the manufacturer of the product onto the selling price of that product.
Ah, you may say – then that will cause the American made version (if there is one) to be more competitive. True, but seeing as the imported product is now more expensive, the consumer of the product – you and me – end up paying more than we otherwise would.
Now let’s say the tariff caused the American version to now be much less expensive than the import. Great for the consumer – for a while. But what will happen, as it does in every protectionist economy, is the American company will then be able to raise its price (while lowering the quality), to just below the price of the import, again causing us to pay more. Either way, the American consumer, us, ends up paying more for goods.
Tariffs are protectionist and protectionism never works. It will always backfire. And the ones who will feel it are American consumers.
Why don’t we just build the wall and forget all the tariff talk. In 2015 I wrote an article entitled, “The Dynamism of Illegal Immigration.”
In it, I explained that by merely deporting the illegals, America would save a minimum of $100 billion annually. So even if the wall did cost $50 billion, which is a one-time payment, we would pay for the wall plus have plenty of money left over to maintain it pretty much forever.
Let’s hope the President reconsiders the “tariff” course of action.