Donald Trump — one of the few remaining American presidential candidates who failed to attend Camp Alphaville last summer — has repeatedly promised he will build a wall along the southern border, with construction costs to be covered by the Mexican government. Since last August, Trump has asserted he can extract this concession by threatening to close America’s trade deficit with Mexico and by threatening to confiscate southbound remittances.
Despite being one of Trump’s signature policies for more than six months, the release of a memo fleshing out a few additional details has led to a flurry of additional coverage, much of it concerned with the possible humanitarian consequences.
We don’t want to focus on whether the idea is actually sound, but on what the proposal can teach us about the balance of payments. It’s possible Trump’s plan, if enacted, could actually cause America’s trade deficit to widen. Read more