Saturday, April 17, 2021

Money doesn’t grow on trees. Fruit does.


Today marks the seventh day, the sixth full day, of President Donald Trump’s term, and after an order to build a wall on the Mexican border, he suggested but quickly stepped back from a 20 percent tariff on imports from Mexico, which he said would pay for the wall.

His suggestion of a tariff was reported by FOX News’s Jared Halpern, who quoted press secretary Sean Spicer as saying the 20 percent import tax could raise “$10 billion a year and easily pay for the wall, just from that mechanism alone.” The idea was simply one of many, Mr Spicer said. The suggestion was widely reported, though, just hours after Mexican President Enrique Peña Nieto cancelled a trip to the White House. I’m glad the president has pulled back, because a 20 percent tariff on Mexican imports would have included lots of food that feeds US children in our schools and added substantially to the cost of feeding those children.

The North American Free Trade Agreement, dating from 1994, drastically changed how food, especially produce, is sold to US consumers, including school cafeterias. It eliminated all tariffs between the US, Mexico, and Canada, thereby creating a continent-wide market. Goods that require cheaper labor are produced, generally, in Mexico, where workers don’t make as much money; goods that require more expensive labor with specialized skills—engineering, design, and so on—are typically produced in the US and Canada. Those chains are complex and have been intimately shaped by NAFTA.

Imposing a tariff on Mexican imports would effectively end NAFTA. Today, Americans consume twice as much fruit, and three times as many vegetables—from both Mexico and Canada—as we did in 1994, according to a lengthy 2015 report from the US Department of Agriculture. “A parade of greenhouse tomatoes, peppers, and cucumbers now come down, often by truck, from Canada. From Mexico, we’ve seen huge increases in imports of seasonal fruit,” NPR reports.

If the president had ended NAFTA, the move would have had disastrous consequences on school budgets to start. Then, if Mexico decided to retaliate against US exports to that country, which I have to think they would, US jobs would drop off the edge. The loss would especially affect skilled labor here, the jobs that require technical or scientific training, which the president had expressed hope in “restoring.”

It’s hard to tell, given the president’s Twitter behavior during the campaign, if the tariff he proposed was serious or even literal. But if this tariff had turned into official US policy, it would not have served American interests—security or economy—at all.

Given my present position, I’m confident in saying that many Maryland high school students who are taking a class in American government as part of their high school graduation requirement understand more about how foreign policy and international economics work than the president has shown with this volley that would have pulled the US out of NAFTA.

As many high school students know, pulling out of NAFTA would send Mexico’s economy into a tailspin. Our proud neighbors to the south would fight back quickly, even though the tariff would require an act of Congress here, however it’s structured. Furthermore, a tax on imports, as the president sent up the flagpole, would be paid for by US consumers of goods partly produced in Mexico. That includes a lot of food consumed by US children in our schools.

Before we get the next bright idea, could someone please sit down with Mr Trump and explain how this presidency thing works?

Our kids would have suffered greatly because they would have had fewer choices for good nutrition available in their schools. Plus, school budgets are already in many cases strapped to the core, even though the feds provide, on average, about 9 percent of those budgets. A tariff like the one he proposed would force expenditures up without any effort to provide more funds to compensate for the spending increases a tariff like this would force.

Paul Katula
Paul Katula is the executive editor of the Voxitatis Research Foundation, which publishes this blog. For more information, see the About page.

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