Mexico Will Pay For The Wall, And They Won’t Have A Choice
President Donald Trump promised Americans he would stop the flow of illegal immigrants, who cause crime and cost us billions.
In addition to increased border security, Trump promised that he would build a wall along the southern border—and that Mexico will pay for the wall—a promise he stuck to even after winning the election, when there was no longer a strong political motive for it:
Mexico will pay for the wall!
— Donald J. Trump (@realDonaldTrump) September 1, 2016
Eventually, but at a later date so we can get started early, Mexico will be paying, in some form, for the badly needed border wall.
— Donald J. Trump (@realDonaldTrump) April 23, 2017
Obviously, Trump meant it when he said “Mexico will pay for the wall.”
Now of course, we now know that Congress’ most recent budget proposal allocated no money to build the wall.
In fact, the $1.5 billion in additional funding for border security was accompanied with a caveat, specifically saying that the money couldn’t fund the construction of new barricades or fences.
And Congress isn’t the only one refusing to pony up.
Mexico (surprise surprise) has no intention of paying for the wall, as Mexico’s President Enrique Pena Nieto’s made very clear:
But does any of this rhetoric matter?
Better question: how will Trump make Mexico pay for the wall? Is it even possible?
In fact, there are at least 6 ways for Donald Trump to make Mexico pay for the wall (which would cost $15-30 billion).
Here they are.
Mexico Will Pay For The Wall: Here’s How
1. Use Confiscated Drug Money, As Per Ted Cruz’s El Chapo Act
Fourteen billion dollars will go a long way toward building a wall that will keep Americans safe. https://t.co/Z89EJF2Vg9
— Senator Ted Cruz (@SenTedCruz) April 25, 2017
The idea behind the El Chapo Act is pretty straightforward.
As Senator Ted Cruz points out, Central American and Mexican drug cartels are enormously profitable—they make billions every year.
Furthermore, they have huge stashes of dirty money—El Chapo’s fortune alone is estimated at $14 billion, and he’s currently in US custody.
Thus Cruz’s plan is simple: let’s use all the confiscated drug money we find to pay for the wall.
And since most of the drug cartels are based in Mexico, this would be an indirect, as well as ironic, way of making Mexico pay for the wall.
2. Cut Foreign Aid To Mexico & Use That To Pay For The Wall
It might come as a surprise to you, but the US pays Mexico some $320 million every year in direct foreign aid transfers, in additional to millions more indirectly.
We also pay another $400 million annually to other Latin American countries.
That money should be withheld, and used to help pay for the wall. It all adds up.
Over 10 years, that’s a solid $3.2 billion in funding, just from Mexico.
Granted, it wouldn’t be enough on its own, but we could use it to apply political pressure on Mexico.
For example: if they don’t throw in some money, we cut foreign aid payments to Mexico, and their neighbors. This would impact their foreign relations with countries like Guatemala etc. We shouldn’t be afraid to engage in realpolitik.
Beyond that, America actually doles out $190 billion in foreign aid, UN payments, and military support every year around the globe—meanwhile 40,000 veterans are homeless.
For that kind of money, we could build a half dozen walls a year, and take care of our own people.
Two birds, one stone.
3. Trump Could Use NAFTA As Political Leverage To Force Mexico To Pay For The Wall
Although I think Trump should scrap NAFTA altogether, and instead negotiate bilateral trade agreements with Canada and Mexico independently, he could use said negotiations to get Mexico to cough up some cash.
Mexico makes hilarious amounts of money through trade with America: they’ve industrialized in a way they wouldn’t have otherwise been able to.
In addition, they’ve modernized their economy using American investment and technology.
Basically, they’re the big winner in NAFTA.
If NAFTA goes, their economy collapses.
They don’t want that—and Trump knows it. We have the leverage.
Let’s use it.
We should give them a simple ultimatum: pay for the wall, or NAFTA goes away.
Mexico will pay for the wall. Guaranteed.
4. Trump Could Slap Up Tariffs On Mexican Goods To Pay For The Wall
Say Mexico plays hardball, and doesn’t take our NAFTA threats seriously.
Two can play that game.
We could impose retaliatory tariffs on Mexican goods, which would kill off their export-driven industries.
Mexico’s manufacturing sector isn’t particularly advanced, nor innovated. It’s only advantage is that it’s cheap. If tariffs suddenly make Mexican products expensive, their industries die.
That’ll give Mexico plenty of incentive to pay for the wall.
And even if they don’t, we import so much from Mexico that even a modest tariff could cover our costs.
After all, Trump’s wall won’t cost all that much, not when you compare it to the value of international trade.
And don’t give me that “tariffs will only hurt American consumers” garbage.
There’s more to economics, and politics, than maximizing comparative advantage. We shouldn’t handicap our ability to negotiate with autistic fidelity to Austrian economic theories (which are wrong anyways, because they’re predicated on a false understanding of economic growth, but that’s a different story).
Bottom line: Mexico will pay for the wall, whether they want to or not.
5. Trump Could Use Money Owed To Mexico To Build The Wall
This one doesn’t need much explanation, so I won’t waste your time.
Right now the US owes Mexico $51.4 billion in terms of national public debt.
If Mexico refuses to pay for the wall, we refuse to pay them back.
Is this option a little backhanded? Yes.
But it’s no more morally duplicitous than Mexico refusing to control its border, and effectively sponging off America’s welfare and penal system to care for millions of its citizens.
Beyond that, it wouldn’t come to that anyways, since Mexico’s fragile government would buckle under the pressure—their state is weak, and couldn’t take the political, or economic hit.
6. We Could Tax Remittances Heavily & Use That Money To Offset The Wall’s Costs
Most people don’t know this, but illegal aliens in America send billions abroad every year, and Mexico is the primary recipient.
These payments are called remittances.
Basically, an alien gets a job in the US, and wires the money home; he remits it.
These remittances are huge.
In fact, in over $130 billion left America in 2015 in the form of remittances.
Remittances from illegal aliens accounted for some $38 billion of this (and over half went to Mexico and Central America).
So, let’s boost the taxes on these and use the money to pay for the wall—it would only take a few years max.
Mexico Will Pay For The Wall, Don’t Worry
There are lots of good options on the table that Donald Trump could use to make Mexico pay for the wall—and they don’t require Mexico’s cooperation.
The US could implement them unilaterally.
So let’s do it.
Illegal immigration’s a big problem, and the wall would help solve it.
Walls work. Also, the wall would be final: the next administration couldn’t get rid of it nearly as easily as they could, say, regulations on deportation enforcement.
It’s a permanent safeguard, and a powerful symbol.
And frankly, we don’t have much of a choice. Illegal immigration is costing America big time—over $30 billion every year in California alone.
Let’s build the wall. And let’s make Mexico pay for it.