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Trump Just Proposed a $60 Billion Tax Hike
"... While president-elect and now president, Donald Trump has threatened new "border taxes" on products from Mexico and China if other reforms don't take place. Now he seems to be proposing a specific tax on imports from Mexico, to pay for the wall he wants to build along the Mexican border, which could cost between $10 billion and $30 billion. Trump says he wants Mexico to pay for the wall, but such a border tax would fall largely on American consumers and US companies. And it could hurt the overall US economy rather than helping.
White House spokesman Sean Spicer told reporters on Thursday that a plan "taking shape" would put a 20% tariff on Mexican goods imported to the United States. There are no such taxes now, since both countries are part of the North American Free Trade Agreement, which eliminates tariffs. A new 20% tax would raise the cost of a $100 product to $120. The importer could bear some or all of the added cost, by keeping the price at $100 and paying the tax in full. But sellers always try to pass new costs onto consumers, and some or much of the cost increase would probably come from consumers' wallets.
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