(CN) – Presidential spokesman Sean Spicer told reporters flying aboard Air Force One on Thursday that the White House plans to impose a 20 percent tax on all Mexican imports to pay for the border wall the president intends to build between the two countries.
President Donald Trump launched his plan to build the wall on Wednesday, and in the 24 hours since has repeatedly insisted Mexico will pay for it.
Mexican President Enrique Pena Nieto responded on Thursday by calling off a trip to Washington meet with Trump to discuss immigration and other issues.
“This morning we have informed the White House I will not attend the working meeting planned for next Tuesday,” the Mexican president tweeted.
He added that “Mexico reaffirms its willingness to work with the United States to reach agreements that benefit both nations.”
Trump responded during a speech in Philadelphia by saying that “unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless, and I want to go a different route. We have no choice.”
Later, he added: “We’re working on a tax reform bill that will reduce our trade deficit, increase American exports and will generate revenue from Mexico that will pay for the wall, if we decide to go that route.”
During a brief gaggle with reporters on the way back to Washington, Spicer said “when you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico.”
“If you tax that $50 billion at 20 percent of imports – which is by the way a practice that 160 other countries do – we can do $10 billion a year and easily pay for the wall just through that mechanism alone,” he said. “Right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous.”
Spicer said the White House has been in close contact with both the House and Senate in creating the tax plan, but did not offer additional details about the tax or how it would work.
Mexico currently sends about 80 percent of its exports to the United States.
Spicer said a significant tax on those goods would provide ample funds for the border wall, “and do so in a way that the American taxpayer is wholly respected.”