White House Sows Confusion about 20% Import Tax Plan

Local Editor

US President Donald Trump's decision to build a wall along the length of the United States' [US] southern border with Mexico erupted into a diplomatic standoff on Thursday, leading to the cancellation of a White House visit by Mexico's president and sharply rising tensions over who would pay for the wall.

With the conflict escalating, Trump appeared to embrace a proposal by House Republicans that would impose a 20 percent tax on all imported goods. The White House press secretary, Sean Spicer, told reporters that the proceeds would be used to pay for the border wall, estimated to cost as much as $20 billion.

But a furious uproar prompted Spicer to temper his earlier remarks, saying the plan was simply "one idea" that might work to finance the wall. Spicer said it was not the job of the White House to "roll something out" on tax policy, while Trump's chief of staff, Reince Priebus, said the administration was considering "a buffet of options."

If Trump does eventually announce his support for the tax plan, it could have a broad impact on the American economy, and its consumers and workers, by sharply increasing the prices of imported goods or reducing profits for the companies that produce them. Other nations could retaliate, prompting a trade war that could hit consumers around the globe.

Retail businesses could see their tax bills surge, said David French of the National Retail Federation, who predicted that those costs would be passed on to consumers. He called the idea "very counter to the way consumers are feeling at the moment."

If nothing else, the rapid-fire developments showed Trump that international diplomacy and a top-to-bottom overhaul of the tax code would not be as easy as an announcement before a campaign microphone. The events unfolded after Trump signed an executive order on Wednesday to strengthen the nation's deportation force and start construction on a new wall along the border.

Adding to Mexico's perception of an insult was the timing of the order: It came on the first day of talks between top Mexican officials and their counterparts in Washington, and just days before a scheduled meeting between Trump and the Mexican president, Enrique Peña Nieto.

The sense of chaos and confusion about the tax issue added to the fallout from Trump's conflict with Peña Nieto, his first direct clash with a world leader since becoming president a week ago. The Mexican peso bounced sharply with each new development.

Tensions between the two had been simmering for months, despite comments by both men that they were trying to work together. Trump's immigration and border-wall decisions on Wednesday appeared to shatter the remaining good will between them.

Source: News Agencies, Edited by website team