Mexican President Enrique Pena Nieto on Thursday cancelled his scheduled visit to Washington to meet United States President Donald Trump, after the White House floated the idea of imposing tax on Mexican imports to pay for Trump's proposed wall along the southern borders of Mexico and America.
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The suggestion has deepened the rift between the neighbouring countries. Pena Nieto took to Twitter on Thursday to announce that he was cancelling the visit to meet Trump. The White House's suggestion of imposing taxes on Mexican goods also sent the peso plummeting.
"We have informed the White House that I will not attend the working meeting planned for next Tuesday with @POTUS. Mexico reiterates its willingness to work with the United States to reach agreements that favour both nations," the Mexican president tweeted.
White House spokesperson Sean Spicer on Thursday told reporters that the US president wants a 20 percent tax on goods coming from Mexico to pay for the construction of the controversial wall. Spicer's suggestion was similar to an existing idea known as border adjustment tax, which the US House of Representatives is considering incorporating as a broad tax overhaul, according to Reuters.
Spicer said that the proposal of the taxes on Mexican imports was currently in the early stages. When reporters asked the White House Chief of Staff Reince Priebus if Trump supported border adjustment tax, he said that the tax would be "one way" of paying for the construction of the Mexican border wall. He added that the tax is a "buffet of options."
Trump, during his presidential campaign, had insisted that Mexico would be made to pay for the construction of the wall along the borders. The Mexican government has, however, repeatedly rejected the claim stating it would do no such thing. Trump had proposed the wall to stop illegal immigrants from Mexico entering America.
If the latest proposal is implemented, then firms would face the taxes if they import products made in Mexico into the United States. The move will, in turn, raise the prices of the said products for consumers in America. The idea of border adjustment tax is unpopular with retailers and businesses, and some lawmakers have also opposed it considering its impact on consumers in America.
