Mexico says if Trump hits them with a "major border tax" they will take "fiscal action that clearly neutralizes it"


#1

Mexico says if Trump hits them with a “major border tax” they will take “fiscal action that clearly neutralizes it” cnnmon.ie/2jjisoT

They are definitely resisting losing the business. Can’t really blame them.


#2

Sounds like Mexico is saying move over Donald Trump. Here comes Mexico with retaliatory action. But yes I can see how his tax could create economic problems including causing higher prices for goods manufactured in the US. Due to less competition from Mexico and therefore less incentive for US companies to keep their prices down and if demand outweighs supply for US products, higher US labor costs which will only be passed on to the consumer. Donald Trump has said only he can fix it and seems to think he has all the answers. No he doesn’t.


#3

Mexico relies on the US, the US doesn’t rely on Mexico.

If US corporations were to shut down operations in Mexico, it would Mexico far greater than the US.

Jim


#4

What fiscal action are they proposing? Mexico depends on the U.S. more than we depend on Mexico.


#5

Mexico would feel it first, definitely, but eventually, the US consumer would feel the pain, and that would be very bad for the US economy after so long.


#6

Tariffs start tariff wars. Can we hurt Mexico worse. You betcha. We are economically powerful enough to oppress any poorer country. Pope Benedict referenced this in Caritas in Veritate, as it originated with Pope Paul VI.

More than forty years after Populorum Progressio, its basic theme, namely progress, remains an open question, made all the more acute and urgent by the current economic and financial crisis. If some areas of the globe, with a history of poverty, have experienced remarkable changes in terms of their economic growth and their share in world production, other zones are still living in a situation of deprivation comparable to that which existed at the time of Paul VI, and in some cases one can even speak of a deterioration. It is significant that some of the causes of this situation were identified in Populorum Progressio, such as the high tariffs imposed by economically developed countries, which still make it difficult for the products of poor countries to gain a foothold in the markets of rich countries.

w2.vatican.va/content/benedict-xvi/en/encyclicals/documents/hf_ben-xvi_enc_20090629_caritas-in-veritate.html


#7

Sadly, I do not see relations becoming any better between Mexico and the United States because of Trump. In fact, I see relations between the two countries getting worse. I could be wrong but I hope that I am not.


#8

But would U.S. consumers feel pain? After all, there are plenty of countries in which wages are far lower than they are in Mexico, and would love to have better access to American markets, exported jobs, and labor entry even if much less than Mexico now enjoys.


#9

I doubt they’ll get better no matter what. Relations have been arms-length at best from the very beginning.


#10

Mexico really isn’t “third world”, but a lot of countries are. Wages there are about 1/3 what they are here, but so is the cost of living there. Unemployment in Mexico is very low.

If we take a strong enough view of the Pope’s comment, we would re-focus the benefits of our favorable trade and other policies toward countries that are a great deal poorer than Mexico.


#11

Mexico could turn to the Russians, and allow them to place troops along the US border.

Russia would see this as payback for the US led NATO troops currently in Poland.

Jim


#12

Sure. And that was always true. But if the Mexicans have any smarts at all, and one believes they do, they would remember that once Russian troops are in one’s country, they tend not to leave.

Nor do I think Russia would particularly want to do it. They had enough bad experience from Russian soldiers coming back from Afghanistan addicted to opiates. Likely they don’t want to repeat that experience in Mexico or anywhere else. Who, after all, are the drug lords going to sell their stuff to?

I think they would find that experience far more “expensive” to them than Trump’s wall will ever be. Trump’s wall might even help Mexico out with its drug syndicate problem, which is severe.


#13

That is a false dichotomy. If I had mentioned aid, you would have a point. But with tariffs, there is not reason not to create hardship in any poorer country. We cannot have a tariff on Mexican good and not have a tariff on, for example, Honduran goods at the same time! :rolleyes:

(note I said "poorer, not third world)


#14

Funny, it’s what Osama Bin Laden said to the Saudi’s, once you allow US troops in, they’ll never leave. He was right.

Also true for Russians.

The Super Power Status makes for arrogance I suppose.

Jim


#15

I pretend to no expertise on the various ways countries erect barriers to trade or add costs to it. But I don’t think there’s a lot of doubt country-specific barriers are fairly easy to create. So, for example, the EU bans “GMO” products which are more or less exclusively from the U.S. Now and then, Japan and Russia ban U.S. meat based on some very thin but country-specific basis. And it is my understanding there are money costs that can be imposed that aren’t necessarily tariffs. At one time, U.S. pet food was banned in the EU because it wasn’t “human consumable”, thus forcing U.S. manufacturers to buy poultry parts from Italy for limited products that could be re-sold in the EU.

An example could be requiring that Mexican meat and livestock exports to the U.S. be subjected to the same antibiotic use requirements and the same level of proof to which U.S. producers are subject, right down to the qualifications of the veterinarians in Mexico.
Inspections could be another. let’s say the U.S. requires USDA veterinarian inspection of all livestock coming from Mexico before it can come into the country, and must be inspected within ten miles of the border, with the animals being placed in sealed trucks (at a cost) before they can enter the U.S., with U.S. border agents inspecting and approving the integrity of the seals before the trucks can go any farther (all at a cost, of course).

And countries limit quantities and types of goods other countries can send at all.

But if you’re saying a “tariff” specifically, must be applied evenly or not at all, I don’t have contrary information to that. But, I have little doubt countries can achieve the same result anyway.


#16

There is a huge difference.

I don’t doubt the Saudis invited the U.S. military in (with restrictions) and maintain that permission. it’s not a matter of the U.S. forcing the Saudis. One remembers that at one time (and probably again) the U.S. was asked to leave the enormous and expensive U.S. facility at Subic Bay in the Philippines. And leave we did. Later we were invited back. I don’t know the status of it right now.

But do you think the Russians would leave Crimea or eastern Ukraine or Moldova or Georgia if those countries’ governments asked them to do so? Russia has already annexed Crimea, and it will eventually annex at least part of the rest of Ukraine if not all of it.


#17

My unit sent a detachment of Marines to Guard Subic Bay, back when it was closing. The Filipinos were robbing it and the Marines were sent to guard it. Unfortunately, my platoon commander was killed during a bank robbery on the base, but the thieves.

But being invited, well as I posted earlier, a way Mexico could pay back Trump is by inviting the Russians to have troops there.

BTW, we’re still in the Philippines, just Subic Bay closed.

Jim


#18

A supply-side economics argument??? :eek:


#19

If people really want more fair-wage products, they are going to end-up paying more for those products for the most part.


#20

Jim,

I suppose an adequate illustration of that idea,

https://scontent.fbed1-1.fna.fbcdn.net/v/t1.0-0/s480x480/16115040_547392732132163_3279054174924989433_n.jpg?oh=504f758557ad025e5f6385d5bace4ecd&oe=591FEFE3


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