President Donald Trump is seeking a tax on goods imported from Mexico and use the revenue to build a border wall, White House spokesman Sean Spicer has said.
Donald Trump’s plan was announced just after Mexican President Enrique Pena Nieto canceled a visit to Washington, amid a row sparked by the question of who will pay for the wall.
On January 25, the president signed an executive order to create a wall on the US southern border with Mexico.
Making Mexico pay for it was one of Donald Trump’s key election campaign pledges.
However, President Enrique Pena Nieto has always insisted that will not happen and on January 26 he pulled out of next week’s White House meeting.
Hours later, Sean Spicer told reporters that President Trump had discussed the funding proposal with lawmakers, and that they are considering making it part of a tax reform package the US Congress is planning.
Sean Spicer said that a 20% tax could generate approximately $10 billion in tax revenue per year.
He said aboard Air Force One: “Right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous.”
He added that the tax will “easily pay for the wall”.
The plan is still being finalized, Sean Spicer explained, saying that the tax could ultimately be as low as 5%.
The rift between the neighbors and trade partners has deepened just days into Donald Trump’s presidency.
After President Pena Nieto pulled out of the summit, Donald Trump said the meeting would have been “fruitless” if Mexico didn’t treat the US “with respect” and pay for the wall.
Earlier the Mexican leader said he “lamented” the plans for the barrier.
In a TV address, Enrique Pena Nieto told the nation: “I’ve said time and again: Mexico won’t pay for any wall.”