US-Mexico crisis deepens as Trump aide floats border tax idea
A diplomatic rift between the United States and Mexico widened as Donald Trump's administration suggested taxing imports from the southern neighbor to fund a border wall and Mexico's President scrapped a US visit
Mexican President Enrique Pena Nieto has said his country will not pay for the planned wall
The White House on Thursday floated the idea of imposing a 20% tax on goods from Mexico to pay for a wall at the southern US border, sending the peso tumbling and deepening a crisis between the two neighbors.
Mexican President Enrique Pena Nieto announced on Twitter around midday on Thursday that he was scrapping a planned trip to meet with US President Donald Trump, who has repeatedly demanded that Mexico pay for a wall on the US border.
"This morning we informed the White House that I will not attend the work meeting planned for next Tuesday with the POTUS," Pena Nieto said. "Mexico reiterates its willingness to work with the United States to reach accords that favours both nations."
The Mexican president's rejection came after Trump said it was "better to cancel" the scheduled visit to Washington if Mexico was unwilling to foot the bill for a border wall.
Later in the day, White House spokesman Sean Spicer sent the Mexican peso falling to its low for the day when he told reporters that Trump wanted a 20% tax on Mexican imports to pay for construction of the wall.
Explaining how the tax would work, Spicer said: "We have a new tax at $50 billion at 20% of imports – which is, by the way, a practice that 160 other countries do right now."
"Our country's policy is to tax exports and let imports flow freely in, which is ridiculous. But by doing it that way we can do $10 billion a year and easily pay for the wall. Just through that mechanism alone," Spicer said giving few details. His comments resembled an existing idea, known as a border adjustment tax, that the Republican-led US House of Representatives is considering as part of a broad tax overhaul, Reuters news agency reported.
The White House said later its proposal was in the early stages.
The plan being weighed by House Republicans would exempt export revenues from taxation but impose a 20% tax on imported goods, a significant change from current US policy.
"If you tax exports from Mexico into the United States, you're going to make things ranging from avocados to appliances to flat-screen TVs, you're going to make them more expensive," Mexican foreign minister Luis Videgaray told reporters at the Mexican Embassy in Washington on Thursday night.
