It seems like every day the president of the United States is doing something that affects every man, woman, and child on the planet (for good or ill). It’s fascinating to watch how he is swiftly and unilaterally leveraging his executive power. Circumventing all convention, he’s attempting to fulfill promises right and left. There’s a real duality when analyzing a newly elected official who is trying to keep his campaign promises insanely fast. We’re wondering if he’s implementing a strategy, instigating chaos in order to pull a slight of hand, or just a bull in a china shop.
Whether you’re right or left your likely to be overjoyed with some of his actions and infuriated with others. But one thing’s certain; we’ve never seen a president quite like him. But we want to talk about a specific executive order—“the wall.” It has become a signature proposal of Trump’s agenda; stirring widespread controversy over its focus on illegal immigration and his comments about immigrants.
On the campaign trail, Trump promised to “build a wall and have Mexico pay for it.” And though Mexican President Enrique Peña Nieto told an assembly of top diplomats that, “Mexico of course will not pay” for Donald Trump’s wall, we know Trump has some kind of strategy behind his declaration. His verbalized plan is to tax imported goods from Mexico an additional 20%. But does he have an anterior agenda—for good or bad—looming in the background?
Some say Trump knows exactly what he’s doing by creating chaos in one area, distracting the masses, while he progresses toward what he’s really trying to achieve. Is he trying to reach a related goal for trade negotiation or NAFTA? Time will tell.
Here are a few “wall” details we know for sure:
- • The border is about 1,900 miles (3,100 km) long and traverses all sorts of terrain.
- • The proposed wall would cover 1,000 miles and natural obstacles will take care of the rest.
- • Some of the wall would crisscross private land, which would have to be purchased, perhaps by legal force, or financial settlements made with owners.
And how much will the wall cost? Trump has put the price at between $8 billion and $12 billion. Others have suggested it could be higher, between $15 billion and $25 billion. Either way, the mystery to us is that the full cost of the wall would be more than covered in 1 or 2 years by the $13 billion in annual revenues we would collect from Mexico.
This is the main reason that it doesn’t make much sense to slap a 20% tax and pay for the wall. Right now we’re importing far more goods into the U.S. than we are exporting to Mexico—avocados, beer, blankets, and more. The concept is super simple: If you place a tax on Mexican products, Mexico will raise the price of goods, and consumers in the U.S will pay more for those avocados. It’s a high-end shell game with unintended consequences.
Regardless of the true intent behind Trump’s methods and the smoke and mirrors that are likely happening, he’s fighting an uphill battle. And for most of us, the jury is still out regarding whether or not his attempts will balance out trade and bring jobs back to the U.S. or not. For this to succeed, the price of imports will need to remain stable.
The future will reveal whether attempting to fulfill so many campaign promises so fast is a good thing or if all we’re really doing is testing the limits of the U.S. checks and balances system.
What does this mean to your personal finances? The complexity of all the moving parts of the economy can certainly be scary—especially when your retirement is riding on what happens with Wall Street. Our mission is to help you build wealth and a retirement plan outside the reach of the Wall Street and economy rollercoaster. We want to give you more details about the Perpetual Wealth Strategy and how it can help you get started in creating an emergency fund and more. We invite you to take 2 minutes to sign up for a FREE, extensive eCourse called Infinite 101®. You’ll receive access to video tutorials, articles, and podcasts. It literally costs you nothing to become educated on this ideal financial strategy and start building wealth.
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