‘This Congress is going to be the busiest Congress in decades — maybe ever.’’
With these words, President Donald Trump urged fellow Republicans in Congress to help him halt illegal immigration by supporting his plan to build a United States-Mexico border wall.
But a wall that isn’t erected by the private land owners bordering Mexican land owners isn’t a wall. It’s government spending. And if government is spending, someone else is footing the bill. That someone is you and me.
To dodge accusations of being a big spender by stretching the U.S. tax dollar over the limits, Trump is hitting back saying Mexico will pay for the wall. But former Mexican President Vicente Fox Quesada says “Mexico is not going to pay for that f***king wall” while Mexican President Enrique Pena Nieto adds that he “[regrets and rejects] the decision of the U.S. to build the wall.” So who will cover the costs?
If the Associated Press is a reliable source, the answer is: the U.S. taxpayer.
Sean Spicer told reporters Trump is cogitating applying a 20 percent tax on Mexican imports, hoping to use the extra money to fund the wall. Meaning that the consumer — U.S. consumer, that is — would pay for the public project.
In an article for the Mises Institute, Tho Bishop lists the types of products that would be subject to the extra tariff. They include vehicles, machinery, electrical machinery, mineral fuels, and plastics. That’s a lot, and for a good reason: in 2015, Mexico was “the United States’ 2nd largest goods export market.”
By adding a tax to the products entering the United States, Trump would be increasing the cost of goods crossing the border. As a result, prices will go up for consumers. But that’s not the only consequence. Producers in the United States using electronics, medical instruments, food, or even vehicles will also see an increase in the cost of materials, which will then translate in lower production and higher costs.
With lower demand, producers will be unable to hire more people and the cost of the final product or service will increase. Consumers will be greatly impacted.
In The Origins of the Federal Reserve, Austrian economist Murray Rothbard writes that “[p]rogressivism was a bipartisan movement which, in the course of the first two decades of the twentieth century, transformed the American economy and society from one of roughly laissez-faire to one of centralized statism.” By concentrating power in the hands of the federal government, the Progressive Era saw increased intervention in American business, increasing tariffs for foreign products and promoting subsidies to local producers. American companies became increasingly less competitive.
By relying on such political privileges, these companies then grow, turning into major corporations with power and influence. As new competitors appear to untangle from the red tape mess ignited in the Progressive Era, these companies double down, going to Congress for more tariffs and regulation.
As American firms become less competitive, the cost of production increases and so does the cost of the final product. Again, the consumer is the one to suffer the consequences.
Trump claims to be for the American blue collar worker — the men and women in this country who rely on their hard work and sweat to pay the bills. The same Joes who also rely on affordable goods produced by foreigners. If the tariff is enacted and the wall is, indeed, erected, these same Joes will have access to fewer jobs and yes, fewer affordable goods.
Trump is enacting a progressive policy designed to increase control over the American individual embraced by Sen. Bernie Sanders, Hillary Clinton, and even President Bill Clinton before him — despite the fact he dressed his policies as “free trade agreements.”
Making the market a battleground is bad — for the consumer and the producer, foreign or domestic.
As America sees one of the lowest rates of illegal immigrants crossing the borders, there’s no reason for a wall. Let land owners erect their walls if they want. The blue collar worker in Salt Lake City has nothing to do with that.
