Fact or Fiction: Donald Trump Says Mexico Is Paying for Border Wall Through USMCA

Carlos Barria/Reuters

President Donald Trump sent out a tweet on January 2 claiming Mexico will pay for the border wall through the new United States-Mexico-Canada Agreement (USMCA).

Trump has been consistent in saying Mexico will pay even before updating the old North American Free Trade Agreement (NAFTA) to the USMCA.

Question

Is Mexico paying for the border wall through this reconstructed NAFTA (USMCA)?

In his tweet, he indicated that most of the wall is finished and highlighted the approval of $5.6 billion as being very little in comparison to the benefits of national security. 

“Mexico is paying for the Wall through the new USMCA Trade Deal. Much of the Wall has already been fully renovated or built. We have done a lot of work. $5.6 Billion Dollars that House has approved is very little in comparison to the benefits of National Security. Quick payback!” Trump tweeted on January 2.

In addition, Trump spoke at the White House on January 10 and said that Mexico is “paying for the wall indirectly, many, many times over by the really great trade deal we just made.”

Research

According to Politifact, there are major arguments against this claim because of the provisions outlined in the USMCA. This agreement doesn’t include any specific language stating Mexico has to directly or indirectly pay the United States for the wall. Also, USMCA won’t realistically take effect until around 2020 because it has not been ratified by Congress. Many qualified experts refute this claim as well.

“Donald Trump keeps repeating the ludicrous claim that somehow the revised NAFTA will fund his wall even though it remains unclear if the deal will be enacted,” Lori Wallach, a director of trade policy for the advocacy group Public Citizen, said in a statement to CBS.

White House strategic communications director Mercedes Schlapp told CNN that U.S. taxpayers would ultimately fund the wall.

Another expert spoke specifically about the cost of implementing a concrete border wall in a statement for USA Today.

“Even if we accept conceptually the argument that government revenue attributable to the revised trade agreement constitutes ‘Mexico paying for the wall,’ there are no plausible assumptions of USMCA’s impact that would see government revenue increase by $25 billion,” Brookings Institution fellow Geoffrey Gertz said.

The partial government shutdown entered its 22nd day on Saturday, making it the longest shutdown to date. Trump and Democrats are still clashing over the funds necessary for the wall’s construction. The Democrats now control the House, and it is unlikely they will concede defeat to Trump.

Fact or Fiction?

Fiction.

Trump has been very consistent in his claim that Mexico is paying for a border wall at the U.S.-Mexico border through USMCA, but it’s not going to happen anytime soon. USMCA is currently not approved by Congress, and the provisions don’t mention anything about Mexico paying directly or indirectly. In its present state, U.S. taxpayers would actually be funding the wall. This claim is rated as false.

What do you think?

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Screwtape
Member
Screwtape

The USMCA is pending Congressional approval. There’s still time for an addendum tariffing Mexico’s estimate $30B in remittances. Even at 25% that’s $7.5B.

Michael
Member
Michael

Don’t give up hope!

Screwtape
Member
Screwtape

Exactly. Making Mexico pay is an exercise in imagination and creativity.

Phyllis Softa
Member
Phyllis Softa

Imagination, creativity and FANTASY! This is all a TV reality series to you?

Screwtape
Member
Screwtape

Just because you lack imagination and creativity does not make it fantasy.

Ed
Member
Ed

Sounds like a good idea, but nowadays anything like that could be easily circumvented, if the fees ended up being less than a tariff. I could see a new electronic currency come about just to get around the new taxes. “MexCoin” digital wallets.

Screwtape
Member
Screwtape

I’d argue the “easily” part. Remember, all cryptocurrencies eventually tie into something real world like cash.

Ed
Member
Ed

True, but some assets are pretty easily decoupled from specific currencies. If one were to buy a gold coin in the US with dollars, put it in their pocket, then sell it in Mexico for pesos, it would be hard to attach any remittance tariff to it. The same could… Read more »

Screwtape
Member
Screwtape

NIce 1st-world ideas. “Decoupled” or not it still starts with cash. If these are available means, then why AREN’T they being used? 1. Access. Why haven’t the cartels moved to gold or crypto? Now picture an uneducated illegal doing so. How will the recipients make them back into cash? 2.… Read more »

Ed
Member
Ed

1. Cartels don’t need to move gold, but they’ve certainly ventured into crypto. If an uneducated illegal can figure out how to use a prepaid international phone card, they could figure out how to use a similarly based crypto method if it goes mainstream at the local 7/11. 2. A… Read more »

Screwtape
Member
Screwtape

3. Security. Gold in your pockets or someone else’s can “vanish”, just like posts here, or be confiscated, stolen, or lost. 4. Since 2012 the US gov’t tracks and taxes gold purchases. It’s possible to “game” the system by buying very small amounts ($500 or less) from multiple dealers (don’t… Read more »

Ed
Member
Ed

3. Gold in your pocket could vanish, just like drugs in a mule. Enough would make it through to cover the losses.

4. I’d make the bet that most of he remittances are $500 or less per transaction. Most illegals probably aren’t usually trucking around $10k at a time.

Screwtape
Member
Screwtape

Let’s have you back that up. Place $10k in gold with a mule. Send it to either Mexico or C.A. Share the results.

No offense, but I suspect that you do not have $10k to throw around.

Ed
Member
Ed

You could wear $10k worth of gold jewelry without looking gaudy and just hop on a plane. How hard do you think it is? This is a society of people who live their entire lives looking for a way to game they system. Where there’s a will, there’s a way.… Read more »

Screwtape
Member
Screwtape

Last drawback. someone has to “mule” the gold. If it’s the original earner that means crossing back into Mexico with risks and expenses entailed if return to the US is desired. After all that’s where they made their “nut”.

Ed
Member
Ed

Gold was just one of the quick examples that I used. My point was simply that charging a tariff on remittance wouldn’t provide anywhere near the projected potential income. And you might be surprised how many illegals go back and forth at will. There’s no wall stopping them, after all!

Screwtape
Member
Screwtape

Back after 3 days of not being able to log in. Let’s be honest. Cash is easiest when dealing with 3rd world economies. Do you honestly believe that a village in Central America has the ability to deal with either bulk gold or cryptocurrency? Also, what #s do you have… Read more »

Ed
Member
Ed

People have been using gold for transactions a lot longer than they have used cash, even in villages in Central America. It wouldn’t take too long to adapt. Crypto might be a little more difficult, but if it ever becomes as easy as using a Visa card, it could be… Read more »

Robert
Member
Robert

Too soon to tell, but I would not be surprised if the US economy benefits more than the cost of the steel barrier. Just reducing the flow would reduce the strain on local economies.

Michael
Member
Michael

You might not be surprised, but justabout every expert would.

Phyllis Softa
Member
Phyllis Softa

When you mess with their fantasies, they get upset. Trump said Mexico will pay and by George, it will happen one day. It is in the reality show script.

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