White House backs away from 20% Mexico tariff

President Donald Trump
PHOTO: Reuters

Washington - The White House on Thursday floated the idea of a 20 percent tax on Mexican imports to pay for Donald Trump's border wall, before quickly backtracking and calling it just one idea among many.

Trump has vowed to "make Mexico pay" for the wall - something Mexico has strongly rejected - but, until today, given little indication of how that would be done.

The financing of the project, which is aimed at clamping down on illegal immigration, has sparked tensions between the two countries.

Mexican President Enrique Pena Nieto on Thursday called off a meeting with Trump set for next week in Washington.

With a war of words escalating, and Congress moving to meet the $12-15 billion price tag though taxpayer dollars, White House press secretary Sean Spicer indicated tariffs on Mexico would be used to claw back the cash.

"It clearly provides the funding and does so in a way that the American taxpayer is wholly respected," Spicer said, adding that lawmakers had considered the proposal in the context of broader tax reform.

But the suggestion was met with fierce blowback.

"When you look at tariffs and repercussions you get from countries that you use your tariffs against, there is always the potential response for retaliation, which normally doesn't support good economic growth," said Republican Congressman Mark Meadows.

Senator Lindsay Graham was a little more colorful.

"Any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad," he tweeted.

Hours later Spicer was forced to row back the idea, saying it was just a hypothetical, one of many options.

"The idea today wasn't to roll anything out or be prescriptive or announce anything, it was to say it's actually not that hard to do," Spicer said.

"The idea is to show that generating revenue for the wall is not as difficult as some might have suggested, one measure alone could do this." On Wednesday, Trump signed an executive order telling officials to begin to "plan, design and construct a physical wall" along the 2,000-mile (3,200-kilometer) US-Mexico border, making good on a central campaign pledge.

Republicans had been mulling a 20 percent "border adjustment" to pay for substantial corporate tax breaks.

But the idea is fiercely opposed by big retailers like Walmart who would see the cost of their imported products go up.

And any such tariff would likely prompt legal action and retaliatory measures from Europe or others at the World Trade Organization.

Spicer said the proposal need not provoke a trade war.

"You can do things in a very WTO- compliant way," he said. "Hypothetically there are several ways you could do that and be compliant."

Trump sworn in as 45th US president

  • President Donald Trump assumed power Friday with a fiercely nationalistic vow to put "America first," declaring a new political era after being sworn in as the 45th US head of state.
  • Hundreds of thousands of people stood in the rain-splattered National Mall to see the 70-year-old Republican billionaire take the oath of office and deliver a stridently populist call-to-arms.
  • Former US president Jimmy Carter and his wife Rosalynn arrive for the inauguration of President Trump.
  • Former US president Bill Clinton and former Secretary of State Hillary Clinton.
  • Former US President George W. Bush and his wife Laura.
  • Bush put up a struggle with his poncho.
  • American casino magnate Sheldon Adelson, a donor to the Trump campaign.
  • Senators Bernie Sanders and John McCain.
  • "From this day forward, a new vision will govern our land," Trump said, promising an end to business-as-usual in Washington.

    "From this moment on, it's going to be only America First."

  • "Today we are not merely transferring power from one administration to another or from one party to another, but we are transferring power from Washington, DC. And giving it back to you, the people."
  • While the US capital city no longer provides official crowd counts, the turnout was visibly smaller than for Barack Obama's two inaugurations, in 2009 and 2013, with sections of the Mall and bleachers along the parade route left empty.
  • And as the incoming leader rallied his supporters for the swearing-in, throngs of his opponents also converged on Washington.
  • Most of the protests - by an array of anti-racist, anti-war, feminist, LGBT, pro-immigration and marijuana legalization groups - were noisy but peaceful, though sporadic violence marred the day.
  • Between 400 and 500 masked, black-clad protesters carrying anarchist flags smashed windows, lit fires and scuffled with riot police in downtown Washington, blocks from the parade held in Trump's honour, with over 90 people arrested for vandalism.
  • Even the peaceful protesters were intent on spoiling Trump's party - letting out a deafening roar as the presidential limousine known as "The Beast" rolled by on the way to the White House.
  • "Not my president! Not my president!" they yelled, as the pro- Trump crowd in bleachers across the street chanted "USA! USA!".
  • Trump's inauguration caps the improbable rise to power of the Manhattan real estate magnate who has never before held elected office, served in government or in the armed forces.
  • His speech was far from the typical optimistic inaugural address that tries to bridge political divides and lift Americans' gaze up to the horizon.
  • It was a deliberate and striking contrast from the uplifting message of Obama, the outgoing president who was among the dignitaries in attendance.
  • Obama and his wife Michelle departed the Capitol by helicopter moments after the swearing-in ceremony, turning a page on eight years of Democratic leadership in the White House.
  • At a Congressional luncheon afterward, Trump led a standing ovation for his defeated election rival Hillary Clinton, saying he was "honoured" that she and her husband, former president Bill Clinton, attended his inauguration.
  • When Trump descended the escalators of his glitzy New York tower in June 2015, his run for office was roundly dismissed and even mocked.
  • Trump and First Lady Melania Trump dance during the Armed Forces ball at the National Building Museum.
  • Trump, the first lady Melania Trump, US Vice President Mike Pence and his wife Karen cut a cake after dancing at the Armed Services ball.
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