20% tax upsurge in Mexican Import

A 20% tax upsurge in Mexican imports will finance the Construction of the Controversial US-Mexican Boundary wall – White House new tax regime comes out.

Soon after the meeting between US and Mexican governments was called off an announcement came from White House Republicans.

Sean Spicer, the secretary of the White House without revealing much details announced that this upsurge in the tax rate would give way to new revenues. It would account for an average increase of $10 billion a year, which would be enough to fund the construction of the wall.

Trump’s central campaign idea to Construct a Border wall at US-Mexican Boundary line is going to take shape soon.

This Wednesday, US President signed the executive order regarding the same which gave way to a lot of Controversy. Also, the President expressed his desire for Mexico to sponsor the Project as well, but Mexican President seemed least interested in it.

The Mexican President, Pena Nieto totally denied to the idea, saying

I regret and condemn the United States’ decision to continue with the construction of a wall that, for years now, far from uniting us, divides us,

This announcement came just days before the pre-scheduled US- Mexican meet.

Trump responded on the Twitter to show his disapproval to Pena

This instantly provoked Pena to call off the meeting, which would act as a strong blow against US-Mexican relationship.

Trump’s way to arrange funds for Construction of Border Wall

But White House knows how to make Mexico pay for the wall. They floated the tax rate on Mexican imports by 20%, which would be enough to fund the construction of the wall. Not directly though, but Mexico is going to sponsor the Border wall construction on America’s discretion.

An estimated expenditure of 20% Billion would be incurred on the construction of the Border Wall. Mexico is unwilling to pay for it. However, Trump has his own plans to get the finances arranged.

Last year US imported goods worth $80 billion from Mexico. As per these estimates the average revenue that US would get from importing Mexican goods would account for $15 billion, which are enough funds to finance the Wall.

This probably is not a tax adjustment approach rather it is a Border Finance adjustment approach through which Mexico would be unwillingly financing Trump’s idea of Border Wall.

This decision might prove to be counterproductive for the economy. Either it would harm the consumers by raising the cost of the commodities or the producers by bringing down their profits.

US-Mexican relations at Stake

Before Trump took the presidential seat, US- Mexico used to share a strong positive bond which benefited both the nations economically too. But Trump’s decision is going to turn the story for the worse.

Also, other nations would retaliate in response to this new tax regime.

Mexico is the second largest market for US manufactured goods and third largest trading partner with America.

A daily trade exchange worth $1.4 billion is being carried on between the two nations, but the recent tax decision is surely going to affect these statistics.

This action of Trump made him to drop the idea of 35% increase in excise duty on American produced goods. He is now thinking to bring it down to 15% only.Taking in another sense, it could prove beneficial to America by declining the imports and increasing the exports.


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