Before you celebrate Donald Trump’s threat to punish Mexico and other nations by increasing import tariffs, it is good to know what it actually means.
The principle of international trade can best be explained by Mexico’s example. It is a poorer country where wages are low. It also has a climate allowing the production of fruits and vegetables at a low cost.
In turn, the United States is a richer country with a higher cost of living and a climate (winter) that limits what can be produced. Mexico is a smaller, still-developing country unable to develop and produce many industrial and chemical products. When Mexico is granted low import tariffs, the direct and immediate effect here is low prices for fruits and vegetables for us, the American consumers. When our tariffs go up, it is our cost of living that goes up, not Mexico’s.
So, in the end, who will actually pay for the wall? You, the consumer. Viva the $2 avocado! Using trade for political purposes doesn’t work. Economic isolation was one of the chief causes of the fall of the Soviet Union.
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Jose M. Campos,