Pathetic if it thinks it has any bargaining position. We could close the border tomorrow and see no adverse impact. They cannot cut exports, but if they do, that’s fine. What we don’t need are Mexicans. If they don’t accept Mexicans back, we cut their products, which we can get elsewhere. Regarding remittances, they need 50% withholding, let senders then get this back with tax returns, presuming their employment is legal and properly documented and taxed.
To be fair, guacamole may go up in costs if we closed the border, but that’s about the only “negative” impact.
What is the Drug Trade Deficit?
Bad plan, a very bad plan. It does not account for human nature.
If remittances are taxed heavily, illegals working in the US will find another method of sending money to Mexico. The drug cartels are already organized and are adept at getting money illegally out of the US and into Mexico. (How else would they pay for the drugs and their profits?) With very little effort they could easily expand into a shadow banking/money transfer system, making enormous profits by undercutting the official tax rate.
Do you really want to add to the power and reach of the drug cartels? And, the answer is not "more law enforcement". We have tried that and it has failed.
The answer is a very modest tax on remittances, something in the 2 to 5% range. Low enough that the certainty and convenience of a legal transfer is worth the cost, and too low to be attractive to the cartels.
Remittances to Mexico are in the $20-40 billion per year range. 5% of this pays for a wall in 5 to 10 years. Remittances to the rest of Latin America are about equal to those to Mexico. Taxing them also would reduce the wall payback time to 2.5 to 5 years.
A line of reasoning I have not seen used yet is that a wall in the US actually improves Mexican security on their Southern border by reducing the number of people who try to migrate through Mexico.