There will be a payment. 


Dear Donald –

It’s unfortunate to see you walking away from such a central campaign promise, particularly when doing so harms the American people so directly. I’m talking here about the promise to make Mexico pay for the border wall. 

Don’t get me wrong – I think the border wall is a truly inane idea. The U.S./Mexico border is approximately 2,000 miles long, much of it running through unpopulated tracts of desert. Slightly over 650 miles of it already has fencing or walls and much of the border that isn’t currently fenced is a low-priority or low-risk area for illegal entry. There are much more sensible ways to spend taxpayer dollars than building 1,300 miles of border walls and fences across sections of the country that are all, individually, very unlikely to see a high volume of crossings. 

Nonetheless, you promised to proceed, and less informed voters rallied to the cause because you said Mexico would pay for it. That claim seemed tenuous back in September, when you visited Mexico and Enrique told you to your face he wouldn’t pay for it. Sure, you tried to save face by saying it didn’t come up, but we know better and Enrique told us as much. After that, the tone changed. You started talking about Mexico reimbursing us. It looked even worse this week when you said “There will be a payment. It will be in a form, perhaps a complicated form.”

Uh oh. 

Now Paul is saying Congress will pony up the estimated $14 billion for construction. I don’t have to tell you how ridiculous it is that the very same lawmakers who argued against funding for Superstorm Sandy relief without budgetary offsets are now perfectly willing to pay billions to build walls hundreds of miles away from the closest human life. 

And then today, Sean comes out and says that it’ll be offset by a 20% tax on imports from Mexico. All this adds up to one thing – the American people are paying for this wall. Maybe you didn’t get to this class in business school, but goods are priced in the market according to the total cost of production (including getting them to market), which means that the cost of an order tax will just be passed on to American consumers. Sure, Mexican companies will pay the cost upfront, but it’ll be passed on to consumers. 

Think about it this way. Let’s say it costs Corona $3.50 to produce and distribute a six pack of beer into the U.S. a 20% border tax would increase that price to $4.20. All Corona needs to do is bump up its wholesale price by 70 cents and it doesn’t feel a bit of economic pain. Meanwhile, all those American beer drinkers pick up part of the tab for the wall.  Whether it’s avocados or tomatoes or car parts or machinery, the price bump will hit American consumers in the wallet. 

You can claim that Mexico is paying for it, but that just won’t be true, and Americans will feel the pinch. One way or the other, we’re getting screwed on this deal. 

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