Trump proposes 20% border tax on Mexico as its president cancels meeting

David Jackson | USA TODAY

Show Caption Hide Caption Trump: Meeting with Mexico would be 'fruitless' President Trump spoke just hours after Mexican President Pena Nieto canceled a planned meeting for the two to meet in Washington. Trump says the two mutually agreed to cancel and that sitting down with Mexico at this point would be 'fruitless.'

WASHINGTON — President Trump proposed a 20% border tax on imports from Mexico Thursday, as his bid to build a wall along the U.S.-Mexico drove a diplomatic divide between the two countries and led Mexican President Enrique Peña Nieto to cancel a scheduled meeting with Trump.

Trump, speaking to a congressional Republican retreat in Philadelphia, said he and Peña Nieto "agreed" to the cancellation; the president said he has made it clear to Mexico that it will finance the proposed wall and that the United States will seek changes to trade agreement with its southern neighbor.

“Unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless and I want to go a different route," Trump said. "We have no choice.”

Meanwhile, Trump pitched through aides his plan to force Mexico to finance the proposed wall: a 20% tax on imports from that country. That, however, was a short-lived declaration.

Shortly after arriving back at the White House Thursday, White House Press Secretary Sean Spicer seemed to backpedal from the tax proposal, saying it was only one option to pay for the wall.

"There are clearly a bunch of ways it can be done," Spicer said. It was the third informal press "gaggle" of the day in which Spicer addressed ways to pay for the wall.

"We're not rolling anything out," Spicer said. "It's going to be a work in progress."

The back-and-forth on the tax followed the drama surrounding the meeting with the Mexican president. Earlier Thursday, Peña Nieto said: "This morning we have informed the White House I will not attend the meeting scheduled for next Tuesday."

Trump broached the possibility of cancellation in a pair of tweets earlier Thursday that also complained about trade relations, particularly the North American Free Trade Agreement with Mexico and Canada: "The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers of jobs and companies lost."

He added: "If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting."

The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers... — Donald J. Trump (@realDonaldTrump) January 26, 2017

of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting. — Donald J. Trump (@realDonaldTrump) January 26, 2017

Peña Nieto, who had been scheduled to meet with Trump on Jan. 31, canceled after publicly condemning Trump's executive order Wednesday authorizing construction of the wall.

Again rejecting Trump's claim that Mexico will finance the barrier, Peña Nieto said, "I regret and reject the decision of the U.S. to build the wall."

White House spokesman Sean Spicer said one way to pay for the wall would be a border tax to be included in an overall tax reform package.

New legislation would be used "as a means to tax imports from countries that we have a trade deficit from, like Mexico," Spicer said.

Trump has also claimed that Mexico is getting the better of the United States in terms of trade, but the trade deficit can also be seen as a sign of economic strength.

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Mexico's economic problems are also among the reasons that so many of its citizens want to come to the United States.

Trump's wall has been a topic of contention between the two countries for months, even as the then-candidate visited Mexico City for a meeting with Peña Nieto in August.

Peña Nieto, who took domestic criticism for hosting Trump at that meeting, was under internal pressure to forgo a trip to Washington to meet with the new president.

Trump has not specified how Mexico might pay for his wall, either through a direct levy or some kind of user fee, but said that will be the topic of upcoming negotiations with Mexican officials. "We'll be reimbursed at a later date from whatever transaction we make from Mexico," Trump claimed in an interview with ABC News.

White House spokesman Sean Spicer said Trump has been very clear and consistent about his wall plan, and "he understands there are diplomatic challenges."

Trump, who claimed during his campaign that bad trade deals have sent U.S. jobs to other countries, has also said he will pursue changes to the North American Free Trade Agreement with Canada and Mexico, or void the deal altogether. In his meeting with congressional Republicans, Trump said he has made clear to the Mexicans that NAFTA is "a terrible deal, a total disaster for the United States."

Mexican Finance Minister Jose Antonio Meade said Thursday that cancellation of the Trump-Peña Nieto meeting will create all kinds of uncertainty around the bilateral relationship.

A former president of Mexico, Vicente Fox, echoed the current government's claim that it will never pay for the wall, and poked Trump in a Twitter post.

"Donald, don't be self-indulgent," Fox tweeted. "Mexico has spoken, we will never ever pay" for the wall.

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