President Trump’s press secretary Sean Spicer told reporters on Thursday that the administration had an idea that would force Mexico to pay for the construction of a wall on the border between our two countries. The strategy? The White House could advocate for a 20 percent tax on Mexican goods being imported into the country. (Spicer later said that this was just a possibility.)
That would certainly work to generate a great deal of money. Mexico is our third-largest trading partner, with trade totaling more than a half-trillion dollars in 2015. The only trick is that this wouldn’t exactly be Mexico paying for the wall: It would be U.S. consumers paying additional costs for Mexican products to make up the total.
And we’re talking about a lot of Mexican products. Our fact-checkers estimate that constructing the wall would cost up to $25 billion, if it’s of the concrete slab type that Trump has discussed in the past. Senate Majority Leader Mitch McConnell (R-Ky.) put the total at $12 to $15 billion this week, though, so we’ll go with that figure.
What does the United States import from Mexico? Electronics, cars, fruits and vegetables, snacks. That sort of thing.
So let’s take the humble avocado. You can buy an avocado for a few dollars at your grocery store — say, $3. A 20 percent tax on that would increase the price to $3.60. A modest but not insignificant increase.
That 60 cents would go to pay down the price of the wall. If we were paying for the wall with only the purchase of avocados, that would necessitate that Americans buy between 20 and 25 billion avocados. In 2014, the United States consumed about 4 billion avocados, 85 percent of which were imported. That’s 3.4 billion avocados from overseas each year, meaning that it would take six or seven years’ worth of avocado consumption for “Mexico” to finish paying for the wall.
All of that’s assuming that Americans want to pay more for Mexican avocados instead of avocados from other countries. If consumption of the fruits (fruits? vegetables?) decreased, it would take that much longer to pay off the wall. Mexico would bear the brunt of that reduced consumption, of course, hurting the country’s economy and, ironically, inspiring more Mexicans to seek work in the United States.
It’s not clear if all 20 percent of the tax would be absorbed by the consumer. Mexican producers could reduce costs to absorb some of the increase — meaning that Mexico would end up paying for part of the wall — but American consumers would pick up the rest of the cost. Those costs would likely trickle into other products that use components made in Mexico as well, since those components would similarly grow more expensive.
Of course, the tax wouldn’t apply only to avocados. Here’s how “Mexico” could pay off the wall by tricking Americans into paying taxes on enormous amounts of other products made south of the border.
Heavy crude oil
Cost: $43. Taxed price: $51.6. Money raised for the wall, per unit: $8.6
Units America would need to buy: 1.4 billion to 1.7 billion.
Tecate six-pack
Cost: $6. Taxed price: $7.20. Money raised for the wall, per unit: $1.20
Units America would need to buy: 10 billion to 12.5 billion.
LG refrigerator
Cost: $1,600. Taxed price: $1,920. Money raised for the wall, per unit: $320
Units America would need to buy: 37.5 million to 46.9 million.
Takis (sort of like Cheetos)
Cost: $6. Taxed price: $7.20. Money raised for the wall, per unit: $1.20
Units America would need to buy: 10 billion to 12.5 billion.
Tomato paste
Cost: $1.20. Taxed price: $1.44. Money raised for the wall, per unit: 24 cents
Units America would need to buy: 50 billion to 62.5 billion.
Lenovo ThinkStation
Cost: $575. Taxed price: $690. Money raised for the wall, per unit: $115
Units America would need to buy: 104 million to 130 million.
Troy-Bilt leaf blower
Cost: $150. Taxed price: $180. Money raised for the wall, per unit: $30
Units America would need to buy: 400 million to 500 million.
Papermate pen refills
Cost: $5.54. Taxed price: $6.65. Money raised for the wall, per unit: $1.11
Units America would need to buy: 10.8 billion to 13.5 billion.
Ford Fiesta
Cost: $21,435. Taxed price: $25,722. Money raised for the wall, per unit: $4,287
Units America would need to buy: 2.8 million to 3.5 million.
There’s a way this could be made really easy. You know who has about $13 billion available and wants to see President Trump succeed? His Cabinet. Get DeVos and McMahon and Mnuchin and Ross to buy a few million Ford Fiestas and a billion avocados or so, and — voilà! — “Mexico” has paid for the wall.
And people think this governing stuff is so hard.
