The Hill reports,
Trump has said the wall would cost $8 billion, but independent estimates peg the price tag between $15 and $25 billion.
The announcement came after Mexican President Enrique Peña Nieto announced he would not come to Washington for a meeting with Trump after the president said he would move forward with his plan to erect the wall — and make Mexico pay for it. His move was interpreted as a sign Mexico will resist paying for the barrier.
It could have far-reaching consequences for American consumers and businesses while exacerbating tensions between the two neighboring countries.The proposal, as explained by Spicer, appears to be similar to a controversial provision that would tax U.S. businesses’ imports and credit exports included in a House Republican tax plan.
The so-called border adjustment provision is part of a broader plan to bring the corporate tax rate down from 35 percent to 20 percent.
“I think the president is using every tool available to him to make sure that, as we put this wall up, he honors his commitment he made to the American people that it’s going to be paid for and that Mexico will pay for it,” Rep. Tom Reed (R-N.Y.), a close Trump ally and member of the tax-writing Ways and Means Committee, told The Hill at the GOP retreat in Philadelphia.
“As we have been dealing on the committee on tax reform, one of the key components of tax reform is called border adjustability. That is a 20 percent tax on imports and a zero percent tax on exports.
“Anything that is going to promote American manufacturing, make American competitive, I’m going to be supportive of.”
Trump previously dismissed the plan in an interview with The Wall Street Journal as being “too complicated.”
But he seemed to offer it his approval in an address to Republicans attending the retreat.
“We’re working on a tax-reform bill that will reduce our trade deficits, increase American exports and will generate revenue from Mexico that will pay for the wall, if we decide to go that route,” he said.
The plan could benefit exporters, such as U.S.-based aerospace companies, but hurt retailers and other American companies that manufacture goods overseas to sell in the U.S.
That could result in higher prices for American consumer goods.
It could also reduce the number of imports coming into the U.S., which would lessen the amount of revenue collected by the tax.
Spicer appeared to come up with the $10 billion figure by applying the 20 percent tax to the U.S. trade deficit from Mexico, which was $49.2 billion in 2015, according to the U.S. Trade Representative.
The value of U.S. imports from Mexico that year was $295 billion.
The spokesman said the White House has been “in close contact with both houses” of Congress about moving forward with the tax plan, which he said could eventually apply to other nations as well.
“Right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous,” Spicer said.