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An Open Letter to President Donald Trump

President Donald Trump

Mr. Trump:

I write to advise you to rethink your plan to have a wall along the U.S.-Mexico border be paid for by the Mexicans.

If you persuade the Mexicans to pay to build this border wall for our (alleged) benefit, are you aware that the result will be economically identical to trade outcomes that you and your trade advisors not only famously lament, but also blame on what you identify as the poor bargaining skills of past administrations?  That is, if Mexicans pay in full to build this wall, Americans will receive from Mexicans a good valued at around twelve billion dollars, with Mexicans accepting nothing at all in exchange from us.  Nada!  Put differently, if Mexico pays for the wall, American imports from Mexico will rise by twelve billion dollars without any increase at all in American exports!

Now that can’t be good!

Surely a man so very smart as you are, and one so skilled at the art of the deal – and one who also fervently believes that Americans “win” when we export as much as possible and import as little as possible – should demand of Mexican President Nieto, not that Mexicans pay the full price of the wall, but instead that the wall be built on Mexico’s side of the border and be paid for exclusively, and with top dollar, by us Americans.  If Pres. Nieto insists on sharing the costs of the wall, be strong!  Resist!  Put your foot down and shout “No señor!”  That way, you see, you’ll have furthered your goal of out-bargaining the Mexicans by increasing our exports to them without our having to accept any additional imports from them!

By your economic reckoning, if you succeed in having Americans pay to build this border wall, and prevent the Mexicans from paying as much as a single peso toward its construction, your brilliant deal-making will have denied the hapless Mexicans any of the gains from building this wall.  You, sir, by successfully bargaining for America to pay fully for the wall, will capture for us all of those gains!

¡Vaya a buscarlos!

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030


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