US-Mexico tensions rise with wall tax idea, meeting scrapped

WASHINGTON

A diplomatic rift between the United States and Mexico widened on Jan. 26 as U.S. President Donald Trump’s administration suggested taxing imports from the southern neighbor to fund a border wall and Mexico’s president scrapped a U.S. visit.

Trump had been scheduled to receive Mexican President Enrique Pena Nieto at the White House on Jan. 31.
Instead, the Republican president is managing a foreign policy spat with a normally friendly nation and key trade partner during his first week in office.

The escalating war of words over who would pay for the proposed border wall - a central pledge made by Trump during his successful presidential campaign - hit the breaking point on Jan. 26.

“If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting,” Trump said on Twitter in the morning.

Under pressure at home to cancel the trip, Pena Nieto, who had good relations with former U.S. president Barack Obama, tweeted later that he had informed the White House that he will “not attend the working meeting” next week.

“Mexico reiterates its willingness to work with the United States to reach agreements in both nations’ interests.”
 
Hours later, Trump told Republican lawmakers at a retreat in Philadelphia that the cancellation was by mutual agreement.

“Unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless, and I want to go a different route. I have no choice,” he said.

White House spokesman Sean Spicer said the “lines of communications” would remain open and Washington hoped to “schedule something in the future.” 

But in a move that is sure to increase tensions, Spicer said Trump could fund construction of the wall - meant to keep out illegal immigrants - by slapping a 20 percent tax on goods from Mexico.

He later specified that it was “one idea that gets it done real easy” and that it could be part of an overall tax reform package.

Republican Senator Lindsey Graham criticized the suggestion, writing on Twitter that Mexico could retaliate with its own levy and that it would be a “huge barrier” to economic growth.

Mexican Foreign Minister Luis Videgaray said Jan. 26 that Mexico was willing to talk with the United States in order to maintain good relations, but paying for Trump’s border wall “is not negotiable.” 

“There are things that are not negotiable, things that cannot and will not be negotiated. The fact that it is being said that Mexico should pay for the wall is something that is simply not negotiable,” Videgaray said during a press conference at the Mexican embassy in Washington.

Such a tax, Videgaray said, would only harm Americans.

“Here in the United States avocados, washing machines, televisions, many things that North American families like to buy and that are expensive, would cost more,” he said.

“It would be the American consumer who would be paying,” Videgaray added.