In what he assures will be "an easy decision," Donald Trump has released details of his plan to "compel Mexico to pay for the wall." In a 600 word statement, Trump proposes, in a potentially devastating move for Mexico’s economy, to block billions of dollars in payments immigrants send back home until the nation made "a one-time payment of $5-10 billion" to the U.S.
The Donald cites a section of the USA Patriot Act antiterrorism law that he argues can be changed to enforce his proposal if he is elected president, but as Bloomberg reports, it's unclear if Trump would be able to carry out the plan without approval from Congress.
Trump's full statement: COMPELLING MEXICO TO PAY FOR THE WALL
Introduction: The provision of the Patriot Act, Section 326 - the "know your customer" provision, compelling financial institutions to demand identity documents before opening accounts or conducting financial transactions is a fundamental element of the outline below. That section authorized the executive branch to issue detailed regulations on the subject, found at 31 CFR 130.120-121. It's an easy decision for Mexico: make a one-time payment of $5-10 billion to ensure that $24 billion continues to flow into their country year after year. There are several ways to compel Mexico to pay for the wall including the following:
On day 1 promulgate a "proposed rule" (regulation) amending 31 CFR 130.121 to redefine applicable financial institutions to include money transfer companies like Western Union, and redefine "account" to include wire transfers. Also include in the proposed rule a requirement that no alien may wire money outside of the United States unless the alien first provides a document establishing his lawful presence in the United States.
On day 2 Mexico will immediately protest. They receive approximately $24 billion a year in remittances from Mexican nationals working in the United States. The majority of that amount comes from illegal aliens. It serves as de facto welfare for poor families in Mexico. There is no significant social safety net provided by the state in Mexico.
On day 3 tell Mexico that if the Mexican government will contribute the funds needed to the United States to pay for the wall, the Trump Administration will not promulgate the final rule, and the regulation will not go into effect.
Trade tariffs, or enforcement of existing trade rules: There is no doubt that Mexico is engaging in unfair subsidy behavior that has eliminated thousands of U.S. jobs, and which we are obligated to respond to; the impact of any tariffs on the price imports will be more than offset by the economic and income gains of increased production in the United States, in addition to revenue from any tariffs themselves. Mexico needs access to our markets much more than the reverse, so we have all the leverage and will win the negotiation. By definition, if you have a large trade deficit with a nation, it means they are selling far more to you than the reverse - thus they, not you, stand to lose from enforcing trade rules through tariffs (as has been done to save many U.S. industries in the past).
Cancelling visas: Immigration is a privilege, not a right. Mexico is totally dependent on the United States as a release valve for its own poverty - our approvals of hundreds of thousands of visas to their nationals every year is one of our greatest leverage points. We also have leverage through business and tourist visas for important people in the Mexican economy. Keep in mind, the United States has already taken in 4X more migrants than any other country on planet earth, producing lower wages and higher unemployment for our own citizens and recent migrants.
Visa fees: Even a small increase in visa fees would pay for the wall. This includes fees on border crossing cards, of which more than 1 million are issued a year. The border-crossing card is also one of the greatest sources of illegal immigration into the United States, via overstays. Mexico is also the single largest recipient of U.S. green cards, which confer a path to U.S. citizenship. Again, we have the leverage so Mexico will back down.
Conclusion: Mexico has taken advantage of us in another way as well: gangs, drug traffickers and cartels have freely exploited our open borders and committed vast numbers of crimes inside the United States. The United States has borne the extraordinary daily cost of this criminal activity, including the cost of trials and incarcerations. Not to mention the even greater human cost. We have the moral high ground here, and all the leverage. It is time we use it in order to Make America Great Again.
The Donald cites a section of the USA Patriot Act antiterrorism law that he argues can be changed to enforce his proposal if he is elected president, but as Bloomberg reports, it's unclear if Trump would be able to carry out the plan without approval from Congress.
World Bank data show Mexico gets about $25 billion in total remittances annually, and while that includes payments originating in other countries, the bulk is from the U.S. The data also show that remittances accounted for about 2 percent of Mexico’s gross domestic product in 2014.
Officials in Mexico have repeatedly said they would not fund the border wall as Trump proposes.
Mexican President Enrique Pena Nieto’s administration said last year that Trump’s plan to bill Mexico for the wall “reflects an enormous ignorance for what Mexico represents, and also the irresponsibility of the candidate who’s saying it.”
Trump said he would also consider adding trade tariffs to Mexican goods or increasing visa fees for Mexican travelers to increase pressure on the Mexican government to pay for the wall.
“Mexico needs access to our markets much more than the reverse, so we have all the leverage,” Trump said in the memo, which also proposes canceling or denying business or tourism visas for some “important people in the Mexican economy.”
Trump released his proposal as Republican voters went to the polls in the Wisconsin primary. If Trump loses that contest Tuesday to Texas Senator Ted Cruz, as polls indicate is likely, it would complicate his path to winning the nomination outright before the party’s national convention in July.
The wall proposal -- and the plan to use economic leverage to get Mexico to fund it -- reflect broader pieces of Trump’s foreign and domestic policy vision.