Trump Proposes Making Mexico Pay for Border Wall by Barring Money Transfers

How Donald Trump Says Mexico Will Pay for the Wall
  • `Easy decision for Mexico,’ Republican front-runner says
  • Obama calls proposal `half-baked,’ based on politics

Donald Trump proposed to block billions of dollars in payments immigrants send back to Mexico if the government there refuses to pay for a border wall, a potentially devastating move for Mexico’s economy that President Barack Obama labeled as “half-baked.”

Trump, who has made building a wall between the U.S. and Mexico to curb illegal immigration a centerpiece of his Republican presidential campaign, released a memo saying he would force Mexico to pay for the wall by threatening to stop remittances until the nation made “a one-time payment of $5-10 billion” to the U.S.

“It’s an easy decision for Mexico,” Trump said in the memo, which cites a section of the USA Patriot Act anti-terrorism law that he argues can be changed to enforce his proposal if he is elected president. The Washington Post first reported his proposal.

It’s unclear if Trump would be able to carry out the plan without approval from Congress. Specialists interviewed by the Post said that such an interpretation of the rights defined by the Patriot Act would be extremely expansive and likely subject to litigation.

Labeled Unrealistic

Obama, speaking to reporters Tuesday at the White House, said the idea is unrealistic. He said Republican candidates Trump and Ted Cruz, a U.S. senator from Texas, are being cavalier with what they’re proposing and doing so for political reasons rather than to find policy solutions.

"The notion that we’re going to track every Western Union bit of money that’s being sent to Mexico, good luck with that,” Obama said. He said U.S. voters and leaders of other nations expect the president to deal with issues seriously. “They don’t expect half-baked notions coming out of the White House. We can’t afford that.”

Obama on Trump’s Wacky Wall Proposal: Good Luck With That

Trump said the majority of remittances Mexico receives are from undocumented immigrants, though the U.S. Government Accountability Office said this year it’s difficult to measure that figure. Obama said many of the remittances are from legal immigrants and U.S. citizens sending money to their families. Squeezing the Mexican economy will only sent more migrants north, he said.

A Trump campaign spokeswoman didn’t respond to a request for comment.

$25 Billion

World Bank data show Mexico gets about $25 billion in remittances annually, and while that includes payments originating in other countries, the bulk is from the U.S. The data also show that remittances accounted for about 2 percent of Mexico’s gross domestic product in 2014.

Trump has said the U.S.-Mexico border wall would cost between $8 billion and $10 billion to build. Officials in Mexico have repeatedly said they would not fund the border wall as Trump proposes.

Mexican President Enrique Pena Nieto’s administration said last year that Trump’s plan to bill Mexico for the wall “reflects an enormous ignorance for what Mexico represents, and also the irresponsibility of the candidate who’s saying it.”

Trump said he would also consider adding trade tariffs to Mexican goods or increasing visa fees for Mexican travelers to pressure on the Mexican government to pay for the wall.

‘We Have Leverage’

“Mexico needs access to our markets much more than the reverse, so we have all the leverage,” Trump said in the memo, which also proposes canceling or denying business or tourism visas for some “important people in the Mexican economy.”

"It would have an effect on Western Union and MoneyGram revenue if this happened," said Larry Berlin, an analyst at First Analysis Corp. who covers those companies. "But to get there, Donald Trump has to win the Republican nomination, he has to win the White House, he has to be able do this, and God knows whether he can do it legally or not. So there are all kinds of obstacles before this could ever really matter. I don’t think they’re quaking in their boots quite yet."

MoneyGram International Inc. and Western Union Co. are two of the largest providers of money transfer services.

“Remittances are an important part of economic development and financial inclusion around the world," said Michelle Buckalew, a spokeswoman for MoneyGram. "Many of our customers depend on our services to pay for basic needs like education, housing and health care.”

Spokesmen for Western Union didn’t respond to phone messages and e-mail requests for comment.

Border Politics

Trump released his proposal as Republican voters went to the polls in the Wisconsin primary. If Trump loses that contest Tuesday to Cruz, as polls indicate is likely, it would complicate his path to winning the nomination outright before the party’s national convention in July.

Trump’s call for a wall stretching hundreds of miles across the southern border of the U.S. has sparked international outrage, even as many of his Republican rivals embraced the idea.

Pope Francis even weighed in, saying in February that focusing on building walls rather than bridges “is not Christian.” Former Mexican President Vicente Fox used an expletive to describe the wall when he said that Mexico would not pay for it.

“He should pay for it,” Fox told Fusion in February. “He’s got the money.”

The wall proposal -- and the plan to use economic leverage to get Mexico to fund it -- reflect broader pieces of Trump’s foreign and domestic policy vision.

Deportation Proposal

Trump has proposed to deport all undocumented immigrants, sending as many as 11 million people out of the U.S. He has also threatened to use tariffs and taxes to punish countries that trade with the U.S., including China, Japan and Vietnam.

As those proposals have drawn rebuke from politicians and business leaders on both sides of the political spectrum, Trump has continued to dominate the Republican presidential primary.

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