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Mexican president Pena Nieto scores a win as White House backtracks on import tax

world Updated: Jan 27, 2017 10:35 IST
Yashwant Raj
Yashwant Raj
Hindustan Times, Washington
US president Donalt Trump

Mexican President Enrique Pena Nieto (left) with then US presidental nominee Donald Trump in August 2016. Nieto cancelled his upcoming trip to Washington as the White House proposed a 20%import tax on Mexico amid the spat over the border wall between the two countries.(AP File Photo)

The United States on Thursday threatened 20% duty on imports from Mexico to pay for a wall President Donald Trump plans to build along the border with the country’s southern neighbour, and then backtracked saying it was only a proposal, “just an idea”.

By the end of the day, President Trump had on his hands his first international dispute, and in his first week in office, he was left looking woefully clueless after Mexican president Enrique Pena Nieto called off their meeting scheduled for next week.

“This morning we have informed the White House that I will not attend the meeting scheduled for next Tuesday with the POTUS,” Pena Nieto tweeted, continuing an exchange started by Trump on the social media site.

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Trump had suggested there was no point going ahead with the meeting if Mexico wasn’t ready to pay for his wall. But it was only a suggestion, cloaked as a threat, broadcast to the world through his favourite bullhorn, Twitter.

Pena Nieto, who was under pressure from both supporters and rivals at home to stand up to Trump and who had already said Mexico would not pay for the wall, called off the meeting, leaving the Trump administration scrambling for a response.

And when they did come up with one — a steep 20% duty on imports from Mexico unsubtly intended to force Mexicans to their knees — they dropped it after a while, inviting criticism that they had been ham-handed and had created confusion.

White House spokesman Sean Spicer, who has struggled to find both rhythm and respect since taking charge of the podium, told reporters in the afternoon that the president was in favour of a plan to impose an import duty on Mexican imports to fund the wall.

“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico,” Spicer told reporters of the protective pool.

“If you tax that $50 billion (Mexico’s trade surplus with US) at 20 percent of imports – which is by the way a practice that 160 other countries do – right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous.

“By doing it that way we can do $10 billion a year and easily pay for the wall just through that mechanism alone,” Spicer said.

Read | After Trump conference, Mexico says won’t fund border wall but wants good ties

The wall is estimated by some to cost upwards of $10 billion, which is the figure Spicer is citing in his calculation. Trump set up the math in a tweet Thursday morning arguing Mexico could pay for it from its $50 billion trade surplus with the US.

Spicer was walking back the bluster in a few hours, calling the 20% duty threat “an idea”, which he tried to pin on House speaker Paul Ryan, repeatedly calling it an “idea”, adding, damagingly, “Instead of 20% it could be 18, it could be 5.”

And that, in essence, was Trump’s response to Pena Nieto.

This wall was the centrepiece of his election plank, which he trotted out dutifully in every election speech and at every rally and led supporters into chanting “build the wall”. And he would remind them of his promise to make Mexico pay for it.

He had never checked that with the Mexicans, of course, and the one time he had a chance, when he made a surprise visit to Mexico City to meet President Pena Nieto as a candidate, he didn’t — critics had said he had choked.

On Thursday, his administration suffered the same mishap.