Will Mexico Pay For The Wall? Experts Pick Sides
When President Donald Trump first floated the idea of a southern border wall, way back in June 2015 while announcing his candidacy, man-made barricades and natural barriers guarded more than 82% of the 2,000-mile U.S.-Mexico divide, according to data from the Government Accountability Office.
Meanwhile, nearly 6 million Mexican immigrants illegally resided in the United States, equaling less than 2% of the citizenship. Research had shown that immigrants commit far fewer crimes than native-born individuals. And economists from Trump’s own alma mater, the Wharton School of Finance, concluded, “The experience of the last few decades suggests that immigration may actually have significant long-term benefits for the native-born, pushing them into higher-paying occupations and raising the overall pace of innovation and productivity growth.”
Now, fast-forward to present day, and President Trump has mentioned the wall dozens more times. He’s promised heights in excess of 50 feet and quoted costs of up to $12 billion, though the Department of Homeland Security estimates a $21.6 billion price tag. And the force with which he has done so seems to suggest that the question isn’t whether the wall should or will be built, because that appears inevitable. Rather, will Mexico really pay for it? And how, exactly, will they do so?
For educated insights and predictions about how this epic drama will play out and what that ultimately means for our wallets, we posed this one question to a panel of leading experts: Will Mexico pay for the wall? You can check out their responses and bios below.
Mexico Will Pay for the Wall
- “What makes President Trump’s claim that `Mexico will pay for the wall’ so effective is that it could easily happen. NAFTA is due for renegotiation and it will be a useful vehicle for President Trump’s demands. The original NAFTA was expected to generate a modest 6 billion dollars a year in new trade flows; a renegotiation could affect billions more. With billions of dollars on the line, President Trump could characterize any concession in negotiations as a wall-payment, and inflate the expected economic gains to make them match the cost of his reinforced concrete monument to nationalism.”
- Robert Gulotty // Assistant Professor of Political Science, The University of Chicago Committee in International Relations
- “While Mexico is unlikely to cut the U.S. a check, the Trump White House will find a way to explain how Mexico is paying for the program—most likely through changes in trade policy.”
- Artemus Ward // Professor - Department of Political Science & Faculty Associate - College of Law, Northern Illinois University
The trouble with restrictive immigration policy is overcoming the moral revulsion people feel when shown images of children torn from the arms of their parents, raided homes and disrupted communities. Aware of this, President Donald Trump prefers we talk about a physical barrier – a wall – drawing attention away from the real human costs of immigration restriction by defiantly boasting that `Mexico will pay for it.’
What makes President Trump’s claim that `Mexico will pay for the wall’ so effective is that it could easily happen. NAFTA is due for renegotiation and it will be a useful vehicle for President Trump’s demands. The original NAFTA was expected to generate a modest 6 billion dollars a year in new trade flows; a renegotiation could affect billions more. With billions of dollars on the line, President Trump could characterize any concession in negotiations as a wall-payment, and inflate the expected economic gains to make them match the cost of his reinforced concrete monument to nationalism.
In many ways, this is business as usual. A wall-payment would be little different from the kinds of side payments inserted in NAFTA by the first Bush administration to satisfy special interest groups. These took the form of policy concessions -environmental rules and a long phase in restrictions on cross-border trucking. There is also no reason not to expect cash transfers. The U.S. paid 300 million dollars to Brazilian farmers to settle a dispute over cotton subsidies in 2014, and in the 1980s the U.S. paid `quota rents’ to Japan to limit its export of cars.
Whether by explicit side-provision, or by relabeling the typical inflated gains from an agreement, we are likely to see President Trump declare victory. Mexico will have paid for the wall. Even if they don’t, Trump will have achieved another sort of victory, focusing attention on the ledger sheet instead of the human cost of his draconian reforms.
Mexico Will Not Pay for the Wall
- “Mexico will not pay for the wall, either directly or indirectly. … Mexicans view their relationship with the US through the lens of a long history of US interference in Mexican affairs. This has been muted over the last two decades, but Trump’s insistence on sending Mexico the bill for a “wall” has re-awakened nationalist sentiment. The Trump administration could impose tariffs on Mexican goods coming into the US as a way of paying for a new “wall” or Congress could impose additional taxes. Either of these moves would invite retaliation and raise the price of goods sold in the US. In the end, it would be American consumers, not Mexicans, who paid for the cost of Trump’s fantasy wall.”
- Michael Jones-Correa // Presidential Professor of Political Science, University of Pennsylvania
- “In the President’s words, the process may happen ‘in a complicated form.’ What are some of the different ways? Suggestions raised—and at times retracted—by the President and his supporters include import taxes, impounding or taxing remittances, visa fees, or border tariffs. Critiques of these strategies—in terms of their impact on regional economic health, their legality, their price to U.S. consumers, or their political costs—are equally numerous. Ultimately, convincing the U.S. public that Mexico is paying for the wall may come down to a complicated ‘Trust me’ on the Administration’s part.”
- Eva A. Millona // Executive Director, MIRA Coalition, Boston
- “The Trump administration may impose a charge on Mexican imports and try to raise the funds that way. But a tariff directed at Mexican imports alone would be a blunt instrument, calling forth a response in kind and perhaps triggering a trade war. More importantly, prices in the United States would rise, American businesses and customers would have to pay more for parts and products, and in this sense Americans, rather than Mexicans, would end up paying for the wall. The tariff would quickly become unpopular politically. It is unlikely, therefore, to be implemented.”
- Kevin Kenny // Chair, Department of History, Boston College
- “For decades, the American policy has been to spend billions of dollars on the border, and then welcome the lucky few who make it (or overstay their visas) with job offers.With one hand, we say “no entry,” and with the other, we say, “welcome.” Given the lack of sense in our policy regarding undocumented workers, Mexico would be foolish to contribute anything for any border barrier. And America would be foolish to build it. ”
- John D. Skrentny // Professor of Sociology, University of California-San Diego & Co-Director, Center for Comparative Immigration Studies
The most obvious reason is that no wall will be built. Even a president who happens to have tremendous expertise in construction could not build a 2,000-mile concrete wall across the southern border of the United States. President Trump may build a continuous fence, and he may add some concrete here and there along the way. But that is not a wall, really.
President Trump will nonetheless continue to insist, vaguely but threateningly, that a wall must be built and that Mexico must pay. Given that the Mexican government is not about to cut a check to foot the bill for a wall that may never be built, two practical options are currently in the air.
The Trump administration may impose a charge on Mexican imports and try to raise the funds that way. But a tariff directed at Mexican imports alone would be a blunt instrument, calling forth a response in kind and perhaps triggering a trade war. More importantly, prices in the United States would rise, American businesses and customers would have to pay more for parts and products, and in this sense Americans, rather than Mexicans, would end up paying for the wall. The tariff would quickly become unpopular politically. It is unlikely, therefore, to be implemented.
A sharper instrument, at least in theory, is the Border Adjustment provision in the DBCFT (destination-based cash-flow tax) proposal by the House Republicans, which would tax imports from all countries, not just those from Mexico, while exempting exports. As the United States imports more goods from Mexico than it exports, the idea is that the balance could be used to pay for the wall.
But even if Congress passes the DBFCT, with its sweeping revision of tax policy, there is no guarantee that the resulting funds would or could be allocated to pay for the wall. From the general pool of revenue raised, how in practical terms could the administration earmark funds raised from Mexico to build a Mexican wall, as distinct from using funds raised from other countries with which the United States runs a trade deficit? Couldn’t funds from those countries be used to build walls too? And wouldn’t these funds be better used, in any case, to offset the reductions in corporate tax revenue, which -- unlike the Border Adjustment taxes on imports -- are the centerpiece of the DBFCT?
Neither a tariff on Mexican goods nor a tax on all imports, then, is likely to pay for the wall. And, in a literal sense, the 2,000-mile wall is not going to be built. The fact that we will get (at most) a fence won’t make much practical difference, given that Mexican immigration has declined drastically in the last decade, with more Mexicans leaving the United States than coming. But why, then, is a wall even needed?
The wall is an idea, not a reality, and it will remain so. Given that an actual wall won’t be built, payment isn’t needed. But the threat to build a wall, like the threat to make Mexico pay for it, is politically potent. That neither half of the proposition is intended to be true scarcely merits comment these days.
The idea of a wall along the border with Mexico was at the heart of now-President Trump’s campaign from the start. In the speech launching his candidacy, Trump declared, "I will build a great wall -- and nobody builds walls better than me, believe me -- and I'll build them very inexpensively. I will build a great, great wall on our southern border, and I will make Mexico pay for that wall. Mark my words." In this statement, he made three promises: that he would build a wall, that it would be built inexpensively, and that Mexico would pay for it. None of these is likely to come to pass.
First, the wall will not be a wall. If something is built all along the U.S./Mexico border, it may be a barrier of sorts, but it is unlikely to be what most people would think of as a “wall” — that is, a continuous, solid structure. The 1,954 mile long border crosses desert, mountains and other rugged terrain that make this kind of structure impractical. Six hundred and fifty miles of border fence already exists: it includes about 350 miles of pedestrian fencing and 300 miles of vehicle fencing.Anything new that is built will resemble a fence more than a “wall.”
Most of the existing barriers are near the urban areas that straddle the border which were once the main crossing points for undocumented migrants coming from Mexico. Any additional fencing would have to be built in much more inhospitable terrain. Because of the difficult terrain, building a “wall” would be very expensive. An internal Department of Homeland Security report estimates that building a barrier along the entire border would run over 21 billion dollars, considerably more than the Trump administration’s initial estimates. Even this higher calculation almost certainly underestimates the costs. Fencing running along the border would require considerable additional infrastructure to be built, primarily roads, alongside the new barrier. This would be pricey, as would the costs of maintaining the border fence, which is not included in the administration’s estimates.It would not be cheap.
Finally, Mexico will not pay for any of this, either directly or indirectly. President Peña Nieto is deeply unpopular; caving in to Trump on paying for the wall would signal the death knell of his administration. Any president of Mexico would face the same overwhelming popular pressure to refuse to pay for a border barrier at U.S. insistence. Mexicans view their relationship with the U.S. through the lens of a long history of U.S. interference in Mexican affairs. This has been muted over the last two decades, but Trump’s insistence on sending Mexico the bill for a “wall” has re-awakened nationalist sentiment. The Trump administration could impose tariffs on Mexican goods coming into the U.S. as a way of paying for a new “wall” or Congress could impose additional taxes. Either of these moves would invite retaliation and raise the price of goods sold in the U.S. In the end, it would be American consumers, not Mexicans, who paid for the cost of Trump’s fantasy wall.
Building a southern border wall, and getting Mexico to pay for it, was one of candidate Donald Trump’s most crowd-pleasing promises, in a xenophobic and divisive presidential campaign where immigrants became scapegoats for the economic and security fears of many Americans. On January 25, President Trump turned the first part of that promise into Executive branch policy—directing Department of Homeland Security to start planning the wall and promising Congressional budget requests to fund it. House Speaker Paul Ryan in turn has said that Congress will work with the President to finance the wall.
So the wall—with its huge and well-documented logistical challenges —appears to getting started. But will Mexico in fact pay back U.S. taxpayers for the price of a wall that a new government study has estimated could cost $21.6 billion dollars?Mexican President Peña Nieto has offered a consistent and resounding “No.” Yet, the Administration and its supporters seem to feel they can force Mexico’s hand. According to Speaker Ryan, “There are different ways of defining how exactly they pay for it.”In the President’s words, the process may happen “in a complicated form.”
What are some of the different ways? Suggestions raised—and at times retracted—by the President and his supporters include import taxes, impounding or taxing remittances, visa fees, or border tariffs. Critiques of these strategies—in terms of their impact on regional economic health,their legality, their price to U.S. consumers,or their political costs—are equally numerous. Ultimately, convincing the U.S. public that Mexico is paying for the wall may come down to a complicated “Trust me” on the Administration’s part.
Yet, the discussion of the wall and who will pay for it—in fiscal, economic, or political terms—begs a deeper question: what would such a wall achieve in terms of changing immigration flows or making the country safer? Net migration of Mexicans to the U.S. has been near zero since 2010, and in 2015 was below zero, with more leaving than arriving.Most of the immigrants coming into the U.S. across the southern border in the past three years have been those fleeing extreme violence in Central America—including thousands of women and children. Here it’s the U.S. that has in fact been paying Mexico millions to stop the flow and send these migrants back home, often to their death.For their part, sophisticated—and airborne—drug cartels and gangs won’t be stopped by the highest wall. Nor is there significant evidence of a terrorist threat from incursions across the southern border.
The wall is a solution without a problem. It is a lie that divides us not unites us, does not make us safer, and will not help fix our outdated immigration system. The furor over the wall distracts us from the real facts—that immigrants strengthen our communities,and economy, that they are part of the fabric of our nation’s past and our nation’s future. Building a bridge to that future through fact-based and pragmatic immigration reform is what we need now more than ever.
While I cannot predict what Mexico will do when presented with the demand to pay for a border wall, I can say that Mexico would be foolish to do so. The reason is simple: For decades, through its actions, the U.S. has welcomed undocumented immigrants. Migrants from Mexico, and many other countries, have simply taken what American employers have offered them: jobs. These migrants did not “steal” them—they took what was freely given. Employers clearly want undocumented immigrants.
Why would I say this? First, it is important to understand that the vast majority of undocumented immigrants come here, and stay here, for work. Of the 11 million still in the country, about 8 million are working. (See here).
Second, there are some businesses that depend on undocumented labor—one could even say that their whole business model depends on undocumented or otherwise exploitable immigrant labor. The most tragic example here is meat and poultry processing. This industry was highly paid, safe, dominated by American workers, and unionized until the early 1980s. Around that time, massive new firms came to dominate the industry, building huge plants in rural areas where there were no American workers—or any workers at all. These firms (e.g., Tyson, Cargill, ConAgra) broke the unions, slashed wages, increased line speeds, and made the industry unsafe, poorly paid and plagued by constant turnover. Only immigrants were willing to move to these rural areas and take these jobs, and estimates place the undocumented contribution as high as 50 percent. The business model here is based on the exploitation of mostly Latino documented and undocumented immigrants.
Other examples include agriculture, which for decades has utterly depended on migrant workers, especially to pick fruit, vegetables and nuts. One farmer recently told the New York Times, “If you only have legal labor, certain parts of this industry and this region will not exist.”
A particularly dramatic example comes from New Orleans, which was only 3 percent Latino in 2000. After Hurricane Katrina decimated the city, a construction and clean-up crew got to work that was nearly 50 percent Latino, many undocumented. The George W. Bush administration even suspended rules limiting the hiring of undocumented workers to allow this to occur.
Third, the U.S. does laughably little to prevent the hiring of undocumented workers. Congress’s laws prohibiting hiring undocumented immigrants dictate that employers are only in trouble if they knowingly hire undocumented workers—something easily evaded with fake papers and a wink. On top of weak laws are weak enforcement efforts. Political scientist Wayne Cornelius, a leading expert on migration, has provided statistics showing that the probability of an employer being audited by the Department of Homeland Security (DHS) is only 0.03 percent—far lower than the chance of an individual taxpayer being audited by the IRS (0.84 percent).
Notably, unlike Obama, President Trump has focused his internal enforcement of immigration laws on the migrants themselves, and not the employers who provide the draw for undocumented migration. DHS raids have focused on apartment buildings, grocery stores, and even schools. When worksites are targeted, the point is to go after the workers, not the employers.
For decades, the American policy has been to spend billions of dollars on the border, and then welcome the lucky few who make it (or overstay their visas) with job offers.With one hand, we say “no entry,” and with the other, we say, “welcome.” Given the lack of sense in our policy regarding undocumented workers, Mexico would be foolish to contribute anything for any border barrier. And America would be foolish to build it.
There are ways that President Trump can claim that Mexico has paid for the wall. A drop in the trade deficit, the imposition of tariffs, the Border Adjustment Tax, a tax on remittances; all these are indirect means of claiming that Mexico and Mexicans have paid for the wall. But 21.6 billion dollars is a lot of money and it will take time to recover. On the other hand, 21.6 billion is a small number when compared with the potential losses for American consumers, manufacturers and services companies if a bilateral economic relationship worth nearly $600 billion a year is put in jeopardy.
So here’s the out: Mexico is already doing an important job and paying a price to protect the U.S. border at a distance, as Secretary of Homeland Security Kelly has already noted on numerous occasions. The United States government comes to an agreement with Mexico that Mexico’s existing and future efforts to control immigration on its own southern border with Central America both cost Mexico and save the U.S. taxpayer billions of dollars a year. Both sides declare that they can live with this outcome, and Trump gets to kick off his campaign for 2020 by claiming that he has delivered on his 2016 campaign promise. Case closed for now.
The U.S. & Mexico Will Both Pay for the Wall
- “Mexico is never going to pay for a border wall and the American people shouldn’t either. President Trump’s $25 billion border wall is a foolish proposition that will most likely never be built. The president’s scheme to raise tariffs on Mexican goods would only boomerang back around and hurt American consumers.”
- Bob Duff // Majority Leader, Connecticut State Senate
- “The wall will end up being paid by all the parties involved because it symbolizes a bad and old-fashioned approach to economic relations between neighbors. Instead of building trade and migration relationships that benefit the flow of goods and factors, thereby increasing the total economic gains, it symbolizes a policy of unilateral rejection of this relationship. Particularly at a time when net migration from Mexico is minimal, trade integration is intense and beneficial for both countries, and security cooperation at the border is essential.”
- Esteban Rossi-Hansberg // Theodore A. Wells '29 Professor of Economics, Princeton University
- “Yes, Mexico will pay for the wall but only indirectly and not in full. It would be political suicide for President Peña Nieto to contribute even a peso of Mexico’s budget to what is viewed by many Mexicans as an affront to their dignity. So, U.S. taxpayers will be on the hook for the direct cost, which is now estimated at between $20 and $40 billion. But both Mexico and the United States will pay in other ways if the wall becomes a reality.”
- Katrina Burgess // Associate Professor of Political Economy, Fletcher School, Tufts University
- “Although there are ways in which Mexico will seemingly pay for President Trump’s proposed wall, the cost will ultimately be borne as well by the United States. Taxes on Mexican imports would punish American consumers who would have to pay a high price for the same goods. These taxes would also hurt US companies that supply Mexico’s maquiladoras with intermediate goods before they are exported back to the US, since demand for those goods will decrease. And since Mexico is likely to retaliate, US companies’ ability to export duty free to Mexico would likely be affected, reducing these companies’ ability to do business and hurting their bottom line.”
- Gustavo A. Flores-Macías // Associate Professor of Government, Cornell University
- "Are we discussing a “wall,” or really a series of different kinds of barriers? And don’t these already exist, in part? If the completion of additional barriers is to be a new involuntary joint venture with Mexico, what, exactly, is the basis for asking them to help pay for the defense of the United States’ Southern border? Should El Salvador, and other Central American countries, also be asked to help pay for any wall since they are responsible for recent border surges of illegal aliens?"
- Stanley Renshon // Professor of Political Science at the City University of New York and Certified Psychoanalyst
It sounds like a simple business arrangement. The U.S. government builds the wall and submits a bill to Mexico, which then writes a check in full. The problem is: it won't happen. There are too many complications. Take two of them:
First, the United States will probably never build the entire wall, certainly not in an expeditious manner. It’s not as if the President issues an executive order, Congress approves financing, and 100,000 worker elves suddenly emerge to erect overnight (or within a couple of years) that big, beautiful nearly-2,000-mile wall. This scenario overlooks such inconvenient niceties as private property rights, Native American reservations, inaccessible terrain, and existent water agreements concerning the Rio Grande River.
Second, no Mexican governmental leader - current, future, or aspiring - would risk a political career by signing such a check. Mexicans, regardless of party affiliation, are too proud and nationalistic for that.
So let me suggest a more likely alternative scenario (not “alternative facts”). The United States never completes the wall. Instead, it builds selected new sections beyond the 700 miles already completed. Homeland Security Secretary John Kelly hinted at this in his February 7 House Homeland Security Committee testimony when he talked of filling gaps with a virtual wall of ground sensors, surveillance blimps, and other technologies. Sounds like a reprise of the Bush and Obama administrations. Therefore, no completed wall, no bill to Mexico, and no payment.
But wait. At the same time, the United States and Mexico re-craft NAFTA. This allows U.S. President Donald Trump to proclaim that the redrawn NAFTA is equivalent to Mexico paying directly for the wall, even as Mexican President Enrique Peña Nieto proclaims that Mexico did not pay one cent. Win-win! Oh, yes, some money changes hands, like U.S. companies paying border adjustment taxes as they bring Mexican-made goods into the U.S. and pass on those costs to the American consumer, but there is no Mexican government payment.
Then the classic D.C public ballet begins. Presidential Counselor Kellyanne Conway spins the Trump victory. The press nails her spin efforts. White House press secretary Sean Spicer calls the press biased because it keeps insisting that Trump actually meant wall when he said wall. Saturday Night Live parodies Trump, Conway and Spicer. Bicoastal elites dutifully smirk along with SNL while sipping Chardonnay. Heartland Trump supporters dutifully repeat his triumphal tweets while drinking beer. (Full disclosure: I grew up drinking beer in Missouri and now sip Chardonnay in California.) Ultimately, the sound and fury recede while D.C. moves on to a different public ballet.
But a few people might actually recall the original issue: who actually pays for the partially-completed wall? That’s simple: workers, consumers and taxpayers on both sides of the border, who once again have been bamboozled by both Mexican and U.S. political elites.
Since the Mexican government keeps denying they will pay, how will this come about? Trump seems now to be saying through a border tax of 20% on Mexican imported goods. And a renegotiation of NAFTA on more favorable U.S. terms.
His problem is that he can’t write an executive order for a 20% import tax. OnlyCongress can do so, and many free traders in the Republican Congress will refuse, seeing it as a violation of their principles and NAFTA. They also recognize that such action would put the U.S. in violation of WTO rules and make it a rogue trade nation, risking global recession.
A brief but related diversion. Just as Trump promises Mexicans will pay for their wall, his broader program is a hidden agenda to force U.S. workers to pay for their own new jobs. Trump’s aimis clear, previewed in “structural adjustment programs” imposed on poor nations by the IMF for the last several decades. If you’re Bangladesh or El Salvador, cut your corporate taxes, deregulate, keep your government small, eliminate unions, cut wages and cut social welfare. The big companies will come and invest in jobs in your country.
Trump will now give U.S. corporations huge tax breaks, deregulate across the board, help end unions, and give massive corporate welfare. In return, some U.S. jobs will come back but they will be the equivalent of sweatshop jobs: low wages, low security, low benefits. Mexicans will pay for the wall that hurts them: American workers will pay for the new “American first” economy that will hurt them.
Mexicans will not pay for the wall ultimately because the Mexicans will rise up against any politician that makes the deal. About 4% of Mexicans view Trump favorably. For obvious reasons, he is the most hated American president ever. He is threatening to kill their economy and shame their nation. They will be on the Mexican streets protesting and preventing Mexican leaders from selling them out.
This is also why Trump’s larger economic agenda will fail. Workers will pay for some jobs they may get. But the trade-off for these jobs is disastrous, since the jobs come at the expense of good wages, economic security and social wellbeing. Ultimately, these workers will not want to pay, any more than the Mexicans will.
Who then will pay for the wall? Despite their own economic interests, it will indeed be U.S. workers and taxpayers who will pay for both the wall and Trump’s larger corporate agenda. Speaker Paul Ryan has already said that the Congress will put up about 12 billion for the wall. Ryan is generously offering American worker taxpayer funds to build the wall.
Ironically, Trump’s own worker base will thus not only pay for the Mexican wall but for the larger set of walls that will “protect” America and dim further their own economic prospects.
The only alternative is the one Mexicans will choose. Just as the Mexicans will revolt before they pay for the wall, American workers should look at their own shrinking wallets as the Trump era unfolds -and join their fellow Americans going out on the streets to protest the wall and Trump’s larger economically ruinous program.
Probably the Mexican peso will also fall (which will dampen the effects). It seems the Peso has fallen quite a bit already in anticipation. While in the short-run a decrease in the Mexican Peso could shift some of the burden of paying for the wall to Mexico (as opposed to being covered to 100 percent by U.S. consumers), in the medium to long run it will likely hurt development in Mexico (and therefore - U.S. consumers).
It could also lead to a tariff war - again hurting U.S. consumers and U.S. workers in export industries. Overall, imposing tariffs on our neighbors is a very bad idea. In fact, it could lead to more illegal migration to the US as the living standards in Mexico may fall.
Now the question is–will/should the wall be built?
The wall proposed by president Trump reminds me of the Great Wall of China. The Great Wall of China was built to protect people and territory from invasion. It was very costly. It is said that as many as 400,000 people died during the Great Wall's construction; many of these workers were buried within the wall itself.
Are we building an extremely expensive wall to protect the U.S. against Mexican invasions, or completely stop trade, legal immigration with Mexico? No, we are building this wall to reduce illegal immigration. To stop illegal immigration, the wall will be the most costly and probably the least effective. We will always have illegal immigrants as long as we have a strong U.S. economy (high quality of standard of living) and the attractive ‘American dream’. Maybe the best way to stop illegal immigrants is to help Mexico achieve faster economic growth and better standard of living. After all, we do not worry too much about the illegal immigrants from Canada.
Are we discussing a “wall,” or really a series of different kinds of barriers? And don’t these already exist, in part? If the completion of additional barriers is to be a new involuntary joint venture with Mexico, what, exactly, is the basis for asking them to help pay for the defense of the United States’ Southern border? Should El Salvador, and other Central American countries, also be asked to help pay for any wall since they are responsible for recent border surges of illegal aliens?
These are not easy questions to answer, but their biggest drawback is that they are tangential to the real issues that are central to the much-needed reform of American immigration policy.
Liberals and conservatives hear the wall question as primarily asking: should it be built? Liberals argue that it should not be because it is a waste of money, regardless of who pays for it, and besides America needs all the immigrants it can get-- however they get here. Some conservatives argue that the wall should, and has to be built --cost be dammed, because only then can the country enforce its borders and immigration laws.
There is a small grain of truth somewhere in each of these opposing assumptions, but their primary effect has been to obscure much more important matters. Who pays for the wall then is, in reality, a metaphor and symbolic stand in for a host of deeper and more central immigration issues:
- What is the purpose of American immigration policy? Is it to serve the country’s economic and political interests—and if so, what exactly are they?
- What sustainable levels of legal immigration are consistent with the purposes of American immigration policy?
- What is the appropriate nature and composition of those offered permanent admission to this country in terms of region, nationality, language skills, ethnicity, education, and professional skills?
- What is the most legitimate and effective set of rules by which immigration enforcement policy should be governed—both for those who come here illegally and for Americans who wish their government to support and enforce a lawful admissions process?
- How should American immigration policy deal with the estimated 11-12 million illegal aliens already living and working in the country? Are there policies that can be put into place that are both understanding of the wish for a better life and the necessity to seriously enforce immigration laws so that compassion is not misunderstood as an invitation to break the law?
The worst scenario would be for Trump to act on his threats to tax migrant remittances, which reached a record $27 billion in 2016, or slap a 20% tariff on U.S. imports from Mexico, which surpassed $300 billion in 2016. A remittance tax would jeopardize a financial lifeline for many Mexican households while failing to cover the projected cost of the wall, especially once migrants found informal ways to send money and thereby evade the tax. An import tariff would raise substantially more revenue but at the cost of higher prices and job losses in both countries, especially if Mexico retaliated with tariffs on U.S. goods or legal action against the U.S. for violating the rules of the World Trade Organization. If Mexican livelihoods were hit hard enough, we could see a renewed wave of migrants, thereby subverting the whole point of building a wall.
Even if Trump backs off his misguided tax schemes, the wall will cost us dearly in wasted revenues, deteriorating bilateral cooperation, and a worsening security situation. It is a solution in search of a problem based on three myths.
Myth #1: We have open borders.
No, the U.S.-Mexico border is already very difficult to cross. The number of border patrol agents has doubled since 2001, along with a 200% increase in the agency’s budget that has funded, among other things, high-tech surveillance equipment. One-third of the border already has a wall, and what remains is hostile terrain that has contributed to the deaths of more than six thousand migrants since 1998.
Myth #2: Undocumented immigration is out of control.
No, apprehensions at the U.S. border have fallen to an historic low since 2009, and net migration of Mexicans to the United States is now negative. Central Americans continue to seek refuge in the United States, but most do not make it to the U.S. border because they are either killed or disappeared by criminal gangs (an estimated 20,000 go missing in Mexico every year) or are caught and sent home by the Mexican authorities, who have deported nearly 700,000 Central Americans since 2008.
Myth #3: The wall will make us safer.
No, migrants will still try to cross the border but their journey will become even more expensive and dangerous. The ones to benefit most are criminal organizations with the sophistication and resources to sneak, bribe, coerce, or otherwise arrange passage over, under, or around the wall, just as they do now but with higher costs, greater risk, and therefore more corruption and violence. So, rather than making us safer, the wall will only worsen what is already a security nightmare.
To paraphrase Pope Francis, we should be building bridges instead of walls, especially with a neighbor whose fate is so closely intertwined with our own and whose struggles inevitably reverberate on the U.S. side of the border.
In addition, under WTO rules, Mexico would be allowed to impose tariffs in response (and would probably cede to political pressure and do it), which would make things even worse. If the U.S. imposes extra taxes on remittances, both the U.S. and Mexico will pay since other less regulated and formal ways of transferring resources will be found; probably fostering further illegal drug and money laundering networks.
More broadly, the wall will end up being paid by all the parties involved because it symbolizes a bad and old-fashioned approach to economic relations between neighbors. Instead of building trade and migration relationships that benefit the flow of goods and factors thereby increasing the total economic gains, it symbolizes a policy of unilateral rejection of this relationship. Particularly at a time when net migration from Mexico is minimal, trade integration is intense and beneficial for both countries, and security cooperation at the border is essential. The idea that antagonizing Mexico with a wall will be useful to the U.S. in terms of either economic gains or national security is extremely hard to believe. All policies of this magnitude require an evaluation of its economic consequences. I have not seen even one that states convincingly that this is a positive present discounted value project.
Consider for a moment what a $25 billion investment in transportation infrastructure would mean for the northeast corridor. The 457-mile rail line between Boston and Washington D.C. is the busiest passenger railway in the nation, carrying over 750,000 passengers each day on more than 2,200 trains. Improving track safety and reliability would improve travel times and promote job growth and economic development. Dredging the major and secondary northeastern ports would reduce the number of trucks on the road and relieve traffic from our highways. Currently, there are roughly 350 structurally deficient bridges in Connecticut – we should invest in repairing those bridges before investing in a wall.
The border wall debate is dog whistle that is meant to divide us as Americans. It’s a symbol of what our politics has become – a game of blaming someone else for the challenges we face.
As a legislative leader in the State of Connecticut, I want our citizens to know that we are proud of our diversity - whether it is racial, cultural, sexual orientation or economic. We've worked hard to make Connecticut a welcoming place for all walks of life, and I will fight like never before to ensure we are always a safe place to call home. Connecticut may be the land of steady habits, but we've always strived to be tolerant and welcoming of our differences. That won't change on my watch.
It is important that we stay vigilant and not let the dark side of politics prevail in our neighborhoods, state or nation. We must all do our part in a peaceful manner and be an example for our children and the larger community. Over time, I'm confident, our higher ideals will prevail.
Another point to consider is the opportunity cost of building the wall, or what the U.S. could do with that money instead. The estimated $20 billion spent on the wall—whose efficacy stopping the unauthorized flow of people and goods is severely questioned—is $20 billion that the U.S. government could have spent on addressing poverty or updating its road infrastructure. Building a pharaonic and not particularly effective wall is another way Americans lose.
Although other measures such as taxing remittances, increasing visa and border crossing fees, or withholding aid might appear to have an effect only on Mexico, they would hurt the U.S. as well. Migration from Mexico to the U.S. has turned negative in recent years, in part because of Mexico’s relatively economic stability over the last quarter century. If Mexico’s economy suffers from these measures, migration to the U.S. is likely to increase again—with or without the wall. This would, paradoxically, result in the exact opposite of what the wall is intended to accomplish: it would encourage Mexicans to migrate north rather than keeping them away.
By one hand, the National Border security is a question of both countries: so the principle of reciprocity should play a relevant role. Both countries should worry about the illegal immigration movement, not because of the immigration itself but because of the “illegal” one. They should try to control the movement of people, not just to control or supervise their movements, but moreover, to maintain the freedom and security of their citizens, on both sides of the Wall or Frontier.
Thus, both will have to cover the cost if it is absolutely necessary for the National Borders Security of both countries. But the main reason is a positive reason, not a negative one: to maintain the level of freedom and security in both countries.
If the initiative is unilateral - only from one of the countries - we are breaking the principle of reciprocity, and the logic and common sense indicates us that this country should cover the expenses of the initiative. In this particular case, should be the USA who should cover the cost if the initiative is only from the USA side.
On the other hand, the reality of the facts will determine that probably the USA - if Mexico doesn’t support any cost of the Wall - will recover the cost of the Wall indirectly (in the long term), through the increase of the taxes to Mexico products that would like to enter into the USA. One can be against or in favor of this Wall policy, but the markets laws of economy will do their work anyway.
Finally, in my personal opinion, President Trump is trying to use his expertise in negotiations to make a final deal with the Mexican Government. He has experience doing that, but I do not know the possible reaction from Mexican Government, who probably will be forced to agree against the contrary opinion of the general public.
The Media communication will have a definitive role on that, and I guess not in favor of the Mexican deal, neither in favor of President Trump.
The commonly heard refrain during the presidential election was the idea of “slapping a 35% tariff on Mexican goods.” This would be fairly difficult to accomplish as it would be a clear violation of NAFTA and could either start a trade war with Mexico or result in Mexico taking its case to the WTO where the United States would, in all likelihood, be punished by the WTO for imposing this type of tariff. If we were to assume that we could somehow get away with this without punishment or retaliation (a huge assumption), this still would not result in Mexico paying for the wall entirely.
Suppose a tariff was put into place, for argument’s sake, and let’s suppose you agree to purchase an item from me for $100 and I sell you this good fairly frequently. Then, the government steps in and imposes a $10 transactions tax that I must pay the government each time I sell you this good. The odds that the price of this good will remain at $100 are almost zero, but the odds that the new price of this good will be $110 are also extremely close to zero. Both of us will be adversely affected by this tax.
If a tariff is implemented, the more relatively elastic the demand is for the goods which will be taxed (this would typically indicate that plenty of substitutes for consumers are available) would indicate that more of the tax burden will be paid by Mexican firms. Of course, it also helps if Mexican firms must sell their goods to the United States, and because a majority of exports from the Mexican economy are sold in the United States this does indicate that the cost to Mexican firms will be substantial. One thing to consider is while Mexico will indirectly bear some of the costs associated with this tax (and therefore the wall), I would say that U.S. consumers will also bear a non-trivial burden. Also, a fairly substantial percentage of this burden will fall on U.S. consumers of modest means given the types of goods which I would expect to become more expensive.
One way I have heard suggested - that might be more effective in collecting tax revenue from Mexico - is to tax remittances which are sent to Mexico. This should be outside of the purview of the WTO and therefore legal. However, I believe this is one of those plans which sounds good but actually implementing this would be a logistical nightmare as people would obviously take actions to hide their behavior in order to avoid paying taxes on remittances. So, we certainly cannot expect to have Mexico pay for the wall, at least not entirely.
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