Donald Trump finally revealed how he’d force Mexico to foot the bill for a multi-billion dollar wall at the border, a plan that’s easily more politically symbolic than substantive, all couched in dog-whistles aimed at appeasing his nativist wing.
His plan, first reported Tuesday by the Washington Post, would effectively extort Mexico, leaving its leaders no choice but to cut a $5-10 billion check to the United States. Financial institutions would be forced to block undocumented immigrants from sending remittances, or money transfers, until Mexico complied with Trump’s border wall payment plan.
The policy specifics come after months of widespread doubt that Trump could feasibly force foreign allies to pay for a domestic project of such massive scale. But experts still remain skeptical that it’s a proposal he could easily pull off. What’s more to the point, it’s unclear whether Trump himself plans to follow-through on his threats.
Undocumented immigrants are typically unable to open bank accounts without a valid ID. But under the current system, they don’t need an account in order to electronically transfer funds to family in Mexico through companies like Western Union. Trump would change that by treating remittances like official bank account transfers, limited only to people with lawful presence in the U.S.
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But the regulations would impact all undocumented immigrants -- not just those from Mexico. Financial institutions would stand to lose broad swaths of their customer base, leaving experts fearful that companies would discriminate against customers they believed to be from Mexico.
Aaron Klein, a fellow at the Brookings Institute, said restrictions run counter to existing laws that intend to bring the flow of remittance into official channels and increase disclosure. Cracking down on the practice could simply fuel an underground market.
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“It’s a huge consumer protection ripoff,” he said. “And forcing people to hold more cash produces an increase in crime.”
Economists also caution that such a plan could cripple Mexico’s struggling economy. Mexico received $24.8 billion in remittances last year, Ana Gonzalez, a researcher with the Pew Research Center, said, with most all of the funds coming from the U.S. in cash flow that makes up 1.8 percent of Mexico’s GDP.
This touches on Trump's own ideological contradictions -- he's a Republican presidential candidate who wants the federal government to tell people what they can and can’t do with their money. The proposal is a small window into how Trump plans to translate his business bona fides as a “great deal-maker” into politics.
“We have the moral high ground here, and all of the leverage,” the two-page memo reads. “It is time we use it in order to Make America Great Again.” Trump’s memo claims that his administration could come to an agreement with Mexican leaders in a matter of days.
On day one, the U.S. would impose regulations barring undocumented immigrants from making money transfers to Mexico. On day two, Mexico would contest the decision, but recognize it stood to lose billions in remittances. On day three, the Mexican government would pay, up-front, the full cost of the border wall. The U.S. would then stand down and never actually implement the regulation.
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However no diplomatic deal is ever that simple, particularly one that effectively holds hostage billions of dollars in remittance. But more importantly, Trump’s proposal is a coded shot at immigrants that hits at the core of the white nationalist sentiment that fuels his candidacy.
It’s no stretch to connect the themes of racial resentment toward immigrants and apply them to Trump’s plan. It hits at the anger toward immigrants who crossed into the U.S. illegally and also perpetuates the misconception that they’re stealing American jobs. In this scenario, immigrants are not only making money under the table, they’re raking in so much cash that they have enough left over to send back to Mexico. Instead of using their earnings to put it back into local communities in the U.S., undocumented immigrants are instead shipping the cash abroad to boost another country’s economy.
It’s an exceedingly narrow perspective on remittance that overlooks the ways in which immigrants stimulate local U.S. economies and pay into federal programs like social security -- benefits that they will likely never earn back. But the narrative plays into the discontent throughout many white communities where education levels are low and underemployment is high.
Trump says he's being tough on Mexico. But he's doing so by squeezing out foreign workers from all over the world, not just our neighbors.