Question 5 The Wall Suppose the Trump administration imposes

Question 5: The Wall Suppose the Trump administration imposes a tariff on imports from Mexico and uses the revenues to build a wall. Who would pay for the wall?

Solution

Trump administration proposed a theory of 20% tariff on imports from Mexico. Actually what the administration is saying is that due to this tax they are going to get 10$ billion every year which is enough to maintain a wall and it is paid by Mexico government. But the actuall scenario will be the US people will be the loosers because if imports are taxed than the US companies and consumers are going to pay the price. As the imports are taxed the cost prices will go high for mexican products in US thus effecting consumers and retailers. Trump should also remeber the 2009 scenario where Obama levied tariff of chinese tires which made the US people get effected.