President Donald Trump is seeking to impose a 20 per cent tax on imports from countries which has a trade deficit with the US like Mexico in order to finance the construction of a border wall along its southern border, the White House said.
This is one of the way to pay for the wall that the US is planning to construct along the US-Mexico border. However the proposal is currently only for Mexico, White House Press Secretary Sean Spicer told reporters travelling with the Trump from Philadelphia to Washington DC abroad Air Force One.
“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico,” Spicer said.
“If you tax that USD 50 billion at 20 per cent 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. By doing it that way we can do USD 10 billion a year and easily pay for the wall just through that mechanism alone,” Spicer said.
“Right now we are focused on Mexico, but I think as we look comprehensively at our trade situation and countries that we have a deficit for, this is something the president has been talking about holistically,” he said.
“He has talked about a border tax. In particular companies that move out, ship things back in. But in this case, this really handles, is focused more on the immigration piece,” Spicer said.
“Remember, keep in mind there are 160 other countries that do just this. We are one of the only major countries, in fact probably the only major country that doesn’t treat imports this way,” Spicer said.
“In fact, we currently tax exports, not imports. This gets us in line frankly with the policies that the other countries around the world treat our products,” he said. “If you think about what a border tax on imports from countries like Mexico that we have a huge trade deficit does, that’s really going to provide the funding,” he added.