Pay for the Wall with Tariff

The rumor is that Trump is going to slap a steep tariff on Mexican imports to pay for the border wall. This by itself is not surprising, as it is the only option that could be realistically claimed as making Mexico pay up.

The thing is, it doesn’t make any economic sense.

As anyone with common sense can predict, sellers of Mexican products will certainly shift a significant portion of the tariff to American consumers. Any decent ECON 101 would have taught the logic behind tax burden, and unless Mexico have no alternative use of their productivity, Americans consumers will have to pay a lot.

Some might say buying American would solve the problem. Or does it? Suppose every Americans decide to become true patriots and stop buying Mexican products—most likely out of patriotism to their wallets—such that import from Mexico drops to zero. Guess what? The tariff revenue will be zero. So ironically, the more patriotic Americans are, the more they will be paying for the wall.

This type of nonsense is what makes Trump so dangerous. He doesn’t care about the practicality of his orders and the whole country has no choice but to go along with him.