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So who will really pay for Trump's wall....? Watch

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    Interesting to see that Trump's suggestion for how "Mexico will pay" for the wall, is to put a 20 per cent tax on imports from Mexico.

    Mexico is the third biggest exporter to the US after Canada and China, mostly vehicles and parts for vehicles, electrical machinery, oil, agricultural products like food, drinks etc. The 20 per cent tariff is going to significantly increase the price of those goods to US consumers.

    In areas where US producers are competing directly with Mexican imports, that tariff will help them because it will drive up the price of the Mexican goods and help offset the advantage Mexico has in its lower costs of labour in production. So it might lead to some degree of US consumers switching from Mexican goods to those produced in the US or other countries. But if it does that will mean that 20 per cent tariff isn't being paid, so the US taxpayer is going to need to pick up the bill for the wall.

    If American consumers do keep buying Mexican goods, they will just pay the higher price in order to cover the tariff - so it will be American consumers who pay for the wall.

    It's the same logic as putting "environmental taxes" on energy bills to "make energy companies pay" for investment in renewables. Everybody knows that that just means higher prices to consumers who will be covering the cost of the tax in their bills.

    So it looks like whilst Americans will get Trump's wall - it will be them who pays for it, not Mexico.
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    No idea but I can't wait for the aftermath of Mexico making an underground tunnel to America
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    If Americans are lucky enough Congress will scrap this stupid plan. Americans will pay for something that will hardly have any impact in their lives apart from the racists who can say "the immigrants are gone" and still find their lives were as *****y as it was before. And now their living costs will increase and real income will decrease.
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    (Original post by sinatraa)
    If Americans are lucky enough Congress will scrap this stupid plan. Americans will pay for something that will hardly have any impact in their lives apart from the racists who can say "the immigrants are gone" and still find their lives were as *****y as it was before. And now their living costs will increase and real income will decrease.
    They already spend trillions on guns and other toys.

    A wall is nothing.
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    (Original post by ChickenMadness)
    They already spend trillions on guns and other toys.

    A wall is nothing.
    This is so exaggerated it's so far from reality.
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    Mexico.
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    (Original post by MagicNMedicine)
    So it looks like whilst Americans will get Trump's wall - it will be them who pays for it, not Mexico.
    Trump seems to have conceded that it won't be Mexico paying for the wall initially, but eventually he will somehow manage to procure payment from Mexico - seemingly in the form of a renegotiation of NAFTA (wouldn't this be required before he imposed an import tax on Mexican goods anyway?).

    If Mexico loses 20% of exports to the U.S. from the tax, then that equates to 20% of $300 billion - $60 billion. Sure, this cost will be translated into higher prices for U.S. consumers (but also potentially the strengthening of domestic job market), but if the wall costs $25 billion then I'm not too sure that Mexico won't just come to some sort of agreement that lets both sides save face.
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    The taxpayer.
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    (Original post by sinatraa)
    This is so exaggerated it's so far from reality.
    Tthey could just spend a tiny fraction of what they already spend on military and build a wall easily.

    They could also do the same and get an NHS.

    I don't think 'money' is a good argument against building a wall since the US spend their money on all sorts of pointless crap already.
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    (Original post by Palmyra)
    Trump seems to have conceded that it won't be Mexico paying for the wall initially, but eventually he will somehow manage to procure payment from Mexico - seemingly in the form of a renegotiation of NAFTA (wouldn't this be required before he imposed an import tax on Mexican goods anyway?).

    If Mexico loses 20% of exports to the U.S. from the tax, then that equates to 20% of $300 billion - $60 billion. Sure, this cost will be translated into higher prices for U.S. consumers (but also potentially the strengthening of domestic job market), but if the wall costs $25 billion then I'm not too sure that Mexico won't just come to some sort of agreement that lets both sides save face.
    lol, so why don't we try this with the EU?

    Announce we are going to build new hospitals and houses, and the EU are going to pay for it with 20% import tariffs on anything coming in from the EU.

    The EU will be so terrified they will come to an agreement to pay us for our hospitals and houses, to avoid the threat of these tariffs.

    I should do the trade negotiations with the EU, I know how to do a deal, I'm real smart.
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    (Original post by ChickenMadness)
    Tthey could just spend a tiny fraction of what they already spend on military and build a wall easily.

    They could also do the same and get an NHS.

    I don't think 'money' is a good argument against building a wall since the US spend their money on all sorts of pointless crap already.
    The wall will have many extra costs when the impact of it will be so insignificant. Most people don't even illegally get to the country through crossing the border anyway. They overstay from their visas, fly over or use boats.

    The wall will also have large maintenance costs too. And many other costs we dont know yet.

    You say they spend it on pointless crap, why should they continue to add on to that then? Surely they should be cutting down on that? Trump's proposing decreasing taxes as well + the debt is very high now.

    It makes no economic sense to invest in this project.
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    (Original post by ChickenMadness)
    Tthey could just spend a tiny fraction of what they already spend on military and build a wall easily.

    They could also do the same and get an NHS.

    I don't think 'money' is a good argument against building a wall since the US spend their money on all sorts of pointless crap already.
    "2015/16, the overall NHS budget was around £116.4 billion"

    "2016 Department of Defense budget request of $585.3 billion"

    $585bn = £466bn.

    UK population = ~65m
    US population = ~350m

    US population is therefore approximately 6 times the UK population.

    NHS budget times 6 = £798bn.


    (Original post by ChickenMadness)
    They could just spend a "tiny fraction"
    Not so much...



    (I don't agree with a wall, btw, I'm just saying that your argument needs refinement)
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    (Original post by MagicNMedicine)
    lol, so why don't we try this with the EU?

    Announce we are going to build new hospitals and houses, and the EU are going to pay for it with 20% import tariffs on anything coming in from the EU.

    The EU will be so terrified they will come to an agreement to pay us for our hospitals and houses, to avoid the threat of these tariffs.

    I should do the trade negotiations with the EU, I know how to do a deal, I'm real smart.
    Not sure why you are responding in such a sarcastic manner when I gave a serious response to the question you asked. :dontknow:
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    (Original post by Palmyra)
    Not sure why you are responding in such a sarcastic manner when I gave a serious response to the question you asked. :dontknow:
    I don't mean to belittle your response, what I'm trying to say is how it is inconsistent as a negotiating strategy: the Mexicans will know that the US consumers will lose out from those tariffs so don't need to be cowed by Trump any more than the EU would be cowed by us threatening to put tariffs on the EU...
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    Like all taxes, it will be borne partly by the seller and partly by the buyer. Such a tax would be a huge cost to mexico. They would be forced to reduce their prices to remain competitive. It could well be that income exceeds the cost of the wall.
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    (Original post by MagicNMedicine)
    I don't mean to belittle your response, what I'm trying to say is how it is inconsistent as a negotiating strategy: the Mexicans will know that the US consumers will lose out from those tariffs so don't need to be cowed by Trump any more than the EU would be cowed by us threatening to put tariffs on the EU...
    The way I see it, Mexico has two options (i) lose more than it would cost to remunerate the U.S. for the wall (because of the import tax), but know that this would be a big blow to Trump's domestic legitimacy/economy (it seems as though the building of this wall will begin immediately so by this point the $25 billion would be a sunk cost for the U.S.), or (ii) reach some sort of deal to pay for the wall, which is an economically superior option to (i) because not only would Mexico not lose in excess of $25 billion in lost export revenues, but its domestic economy would not suffer as a result of less demand for Mexican exports.


    Whether Theresa May would adopt a similar strategy WRT hospitals and the EU is neither here nor there.
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    It's amusing how he thinks that Mexico is going to pay via tax, when the tax will actually be a part of the US economy and thus the US is still paying for it.
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    Trump will just assert that Mexico has paid for the wall.
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    (Original post by Palmyra)
    The way I see it, Mexico has two options (i) lose more than it would cost to remunerate the U.S. for the wall (because of the import tax), but know that this would be a big blow to Trump's domestic legitimacy/economy (it seems as though the building of this wall will begin immediately so by this point the $25 billion would be a sunk cost for the U.S.), or (ii) reach some sort of deal to pay for the wall, which is an economically superior option to (i) because not only would Mexico not lose in excess of $25 billion in lost export revenues, but its domestic economy would not suffer as a result of less demand for Mexican exports.


    Whether Theresa May would adopt a similar strategy WRT hospitals and the EU is neither here nor there.
    Mexico will be stupid to pay a penny of the Wall since if they did pay, Trump will ask for more money for other stuff like the cost of deporting illegal immigrants or the cost of maintaining the Wall.
 
 
 
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