Trump is showing what protectionism really is, only in a misconstrued way.
The plan for Mexican wall has reached a new level, after all. There are several factors of cost concerning the structure. First, the plan includes extending the wall into mountainous and increasingly remote regions – significantly raising the construction costs. Moreover, about 1, 000 miles will crisscross private lands – which requires purchasing either by financial settlement or legal force. Based on these facts, the wall will cost an estimated $21.6 billion.
Trump seems clear on the billing too: raising tariffs on imports, through remittances, levying a border adjustment tax, and raising border crossing fees and travel visa. Mr Trump proposes a 20% tariff on all imports from Mexico. In his view, Trump believes that Mexicans will cater for the costs since the tax is imposed on Mexican goods. However, the reality is that Americans would be paying, when they purchase the goods at local level. The tricky part is that this is a sales tax on Mexican goods but paid for by the buyers – the Americans. And, the tariff is expected to put most Mexican firms out of business. This is because the tariff will reduce demand among American consumers for Mexican products – forcing the firms to go under and hence increase economic hardship for Mexicans.
With Trump exhorting American firms operating in Mexico, the situation would further worsen economic conditions and unemployment in Mexico. This may result in increased illegal migration into US in search of economic prosperity and employment – the exact opposite of Trump’s anti-immigration policy. Guajardo points out that Mexicans would rather suffer economic hardship than pay for an “offensive, stupid and useless” wall.
The link between Tijuana (Mexico) and San Diego (California) details what is at stake relative to the wall, as a rhetoric. Friendship, cheaper dentistry, and old-time associations, had been some of the several benefits of having a good neighbour. Trade has flourished since NAFTA, with America being Mexico’s largest exporter and Mexico being America’s second largest. The two nations “no longer simply sell finished products to one another. Instead, they build things together.”
Trump’s political agenda is to scoop out undocumented Mexican immigrants from US and dump them outside the wall, though at an absurdly high cost. Decreasing illegal immigration means encouraging economic prosperity in Mexico too. Achieving this, in that particular direction may be quite a challenge, in reverse. The more prosperity, the less incentive will people travel north in search of work.
It is speculated that encouraging total free trade between the US and Mexico will definitely assure economic prosperity for the two nations. Despite implementing such a strategy: interventionism, socialism, and regulation afflicting both states furthered by warfare-state problems of US would still exist. There is little doubt that even free trade would restore peace, prosperity, friendship, and harmony between Mexico and US.
There are two more profound aspects to consider here. The Mexican wall border has woken up the Mexican government to realize how economically dependent it is on the U.S. The wall is also the only chance for Mexico to bar Trump from making drastic changes to NAFTA, which might cause havoc in Mexican economy. On the other hand, the U.S is not facing the real enemy. The proposal to deport illegal immigrants over the wall is expensive and the least effective approach to secure the border. In fact, as some research points out, most of the illegal immigrants are not Mexicans. Immigrants from Central America, especially minors who come to the country for survival, and immigrants are from advanced countries, who overstay their visa limit, would all have to be considered. In general too, the large immigrant population, which stood at 42.4 million in 2014 alone, is a mixed one. Rebuking Mexico alone may not be a good idea. Mexico, on the other hand must seek other trade pacts across the Pacific rather than depending on US, and gain economic freedom.