President Trump’s bullying rhetoric against Mexico last week was insulting to Mexico and reflected the shallowness of his concept of the wall, its costs, and how they will be financed and borne, writes Vanda Felbab-Brown. The president must explain his calculus of the wall's direct and indirect costs and the assumptions on which they are based. This piece originally appeared in The Hill.
President Trump’s bullying rhetoric against Mexico last week was not only insulting to Mexico, but also reflected the shallowness of his concept of the wall, its costs, and how they will be financed and borne. The U.S. Congress, media, and public must diligently query the president about his calculus of direct costs of the wall and the assumptions on which they are based. He must also be pressed to address the indirect costs, of which there are many.
The most obvious cost is that of its physical construction. Trump has put the price-tag at $12 billion. Other estimates put it at $285 billion, which could potentially mean that each U.S. taxpayer would have to pay some $900 in new taxes. These disparate claims appear to reflect different assumptions. Further, many parameters are not yet known, such as what type of wall is to be built in various segments of the border. Parts of the border are not fenced already because the construction costs of a physical barrier due to the terrain, for example, were deemed to be prohibitively high by the George W. Bush administration. Nor is it clear what the White House bottom line actually includes. Does it incorporate the cost of lawyers to negotiate compensation to landowners for building the wall on their lands in places where terrain does not allow it to be located on the actual border? Does the number include the costs of hiring scores of forensic auditors to determine which remittances to Mexico come from U.S. citizens and which come from undocumented workers? Recall, Trump’s campaign promise to fund the wall by seizing remittances to Mexico. Depriving Mexico of remittances is bad for the U.S. because it depresses the economy of a principal trading partner and stimulates further illegal migration into the U.S. Moreover, its implementation is both very costly and difficult.
[T]he broader economic costs of the wall are detrimental to the U.S. economy no matter what financing option the White House picks.
Indeed, the broader economic costs of the wall are detrimental to the U.S. economy no matter what financing option the White House picks. But some are worse than others. If, for example, the White House persisted with the idea of imposing a tax on imports from Mexico, it would significantly hurt U.S. retailers. Many would pass off the costs onto U.S. consumers, including the segment who voted for Donald Trump. From cars to vegetables, goods in the U.S. would become far more expensive. Moreover, Mexico could retaliate by imposing taxes on U.S. exports. Also, Mexican citizens could retaliate by boycotting U.S. companies that operate in Mexico, such as Wal-Mart and Starbucks, as they are already attempting to do. Such boycotts could send the shares and profits of U.S. companies plummeting, negatively affecting U.S. jobs, taxes, and the economy. NAFTA could collapse altogether, wreaking havoc on the continental economy that has steadily grown over the past two-and-a-half decades. U.S. manufacturers, such as automakers, whose production lines are deeply integrated with Mexico, would be deeply hurt.
Contrary to its proclaimed goal of making America secure, the wall has the potential to undermine U.S. security. If Mexico stopped cooperating with the U.S. in going after violent criminal groups and drug cartels, the U.S. would be much worse off. Mexico could retaliate further by giving up efforts to secure its southern border with Central America, augmenting the flows of migrants and contraband to the north. The U.S. would then face bigger border security challenges than if it maintains a cooperative security relationship with Mexico without a wall. If U.S.-Mexico relations continued to plummet to an unprecedented degree, Mexico could even stop sharing counterterrorism intelligence.
A significantly weakened Mexican economy could further exacerbate the severe criminal violence that has gripped Mexico for over ten years. Fewer remittances and increased unemployment and poverty have the potential of driving many more desperate young Mexican men to joining drug gangs, or to increased poppy cultivation, extortion, and other criminal violence.
The wall also has significant environmental costs. Parts of the border are some of the continent’s most significant wildlife corridors. Among the endangered species affected by the wall would be the jaguar, the Sonoran pronghorn, and Chiricahua leopard frog. The other many negatively-affected species would include the desert tortoise, black bear, desert mule deer, and a variety of snakes. But even species that can fly, such as Rufous hummingbirds and the Swainson’s and gray hawks could be harmed. Vital pollinators that migrate across the border, such as insects, could end up burnt up by the lights necessary to illuminate the wall.
A poisoned U.S.-Mexican relationship could prevent the renegotiation of vital water sharing agreements, such as over the Colorado river. That would not only critically harm the environment, but also potentially undermine both U.S. and Mexican water and food security and agricultural production.
U.S. belligerence on the wall, the hunting down and deportation of undocumented migrants, the destruction of NAFTA and the multiple blows to the Mexican economy could revive intense populism and nationalism in Mexico. They could fuel the electoral prospects of populist firebrands. Such populism could reverse important recent accomplishments such as the badly-needed partial privatization of Mexico’s oil sector.
Worst of all, these multiple costs will not be offset by the proclaimed benefits. Smugglers from Mexico will dig tunnels under the wall or use drones to fly their contraband across it. Migrants will get into boats, forcing the U.S. to face a less-acute version of the Mediterranean migration tragedy, but one of its own making. These new forms of smuggling will create new adaptation costs, such as the need to increase the Coast Guard budget. The United States gains little and loses much by having its southern neighbor suffer.
[The Trump administration] felt that they had expressed concerns over the law, and Sisi said he was not going to sign it, and then he went ahead and signed it. Their expectations were betrayed.
Middle East crises and conflicts – the way ahead
Many people in Washington rushed to the conclusion … that the TPP was dead. I think this reflects the fact that many people in the United States cannot think that an ambitious trade agenda can go forward without the United States. These [talks] would actually put Japan really in a leadership position.