Donald Trump’s idea to impose a border tax on goods coming from Mexico would have a significant economic impact on Utah, and not in a positive way.
The Trump administration floated the idea as a way to recoup the costs of building a border wall after using taxpayer money for the initial construction. The wall could cost upwards of $20 billion.
Derek Miller, President and CEO of the World Trade Center Utah says he’s not a fan of the border tax because it would likely ignite a trade war with Mexico, who is a big trading partner with the U.S. and Utah.
“It’s a lose-lose, particularly for Utah companies because Mexico is the 2nd largest trading partner for the United States, but it’s also the 3rd or 4th, depending on the day, largest trading partner with Utah,” said Miller. “The thing that doesn’t make any sense is if you increase the price of goods coming into the United States, it’s consumers who pay that. The Mexican companies don’t pay that. If it’s an input into some sort of manufacturing process, it’s the U.S. companies that pay that, but then they pass that on to the consumers.”
Miller was a guest on the “I have questions with Bryan Schott” podcast. He said imposing a tariff is not as simple as black and white.
“Think of your phone. Ask yourself where is that made? The answer is almost everywhere. There are parts of that phone, and this is true of almost every product, it’s coming from all over the world. We need to think about these things with a little more complexity.”
Trump has also promised to renegotiate NAFTA. Miller says it’s an idea he would be open to, but only if it’s with an eye to improving trade.
“If we’re renegotiating trade deals, and NAFTA is over two decades old, it probably needs to be revisited, there are things in there that need to be changed,” said Miller. “If we’re talking about that, I view it as a positive. If we’re talking about protectionism and isolationism, then that will absolutely hurt Utah.”
The bottom line for Miller is, as long as Trump can deliver on his promise to improve the American economy, he’s on board.
“If we can get a better deal out of NAFTA, let’s do it. But, let’s not put up trade barriers that will hurt Utah.”
