“Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad.”
That was just one of a pair of tweets from Sen. Lindsey Graham (R-SC) in response to a proposal from the Trump administration suggesting that a wall between the United States and Mexico might be paid for by a border tax.
Reminding his constituents that Mexico is the United States’ third largest trading partner, Sen. Graham also tweeted, “Any tariff we can levy they can levy. Huge barrier to econ growth.”
Those tweets followed a series of conversations focused on President Trump’s border wall: the wall had been a centerpiece of the President’s campaign. President Trump promised voters that he would build a wall between the U.S. and Mexico and that Mexico would pay for the wall.
On January 25, 2017, President Trump signed an Executive Order titled “Border Security and Immigration Enforcement Improvements” (you can read it here). The Order calls for a number of steps including “the immediate construction of a physical wall on the southern border, monitored and supported by adequate personnel so as to prevent illegal immigration, drug and human trafficking, and acts of terrorism.”
In recent days, the White House has maintained that Mexico would pay for the wall but suggested that the repayment might be in the form of a reimbursement or a more “complicated” formula. The President now says that U.S. taxpayers will pay for initial construction of the wall, a proposal that a number of those in Congress appear to support. President Trump has estimated that the wall would cost between $8 billion and $12 billion while Senate Majority Leader Mitch McConnell has estimated the cost to be between $12 billion and $15 billion.
That plan, as you can imagine, is not popular in Mexico. Mexican President Enrique Peña Nieto released a statement on Wednesday saying, “Mexico does not believe in walls. I’ve said time again; Mexico will not pay for any wall.” Nieto later canceled a planned meeting with Trump in Washington.
In order to pay for the wall, White House Press Secretary Sean Spicer suggested on Thursday that the U.S. might impose a 20% border tax on Mexico (Spicer later clarified that the 20% tax was not a policy proposal but an example of how to pay for the wall). Spicer brushed off criticisms that U.S. consumers would bear the brunt of the tax in the form of higher prices.
(For more information on the border tax – as well as the GOP’s border adjustment proposal – see Forbes contributor Tony Nitti’s piece.)
However, Sen. Graham clearly has concerns about the potential impact of a border tax on consumer prices. I reached out to his office regarding those concerns and his views on the potential border tax. Kevin Bishop, the Communications Director for Sen. Graham, responded that the tweet “says it all.”
