US president claims Mexico will indirectly fund his long-promised wall through new trade deal

In his first prime-time address from the Oval Office earlier this week, Trump said the project would “be paid for indirectly by the great new trade deal we have made with Mexico.” Is he right? What has Trump said?

The President's position on how Mexico might pay for the wall has “shifted considerably” in recent months, says BBC Reality Check.

Throughout his campaign, Trump repeatedly vowed that America’s southern neighbour would stump up the money for the steel barrier.

Between his announcement speech and the 2016 election, he declared 212 times that Mexico would pay for the wall, according to Factbase, which tracks all of Trump’s interviews, speeches and tweets.

He then went on to argue that the wall would “pay for itself” within two months, due to the high cost of illegal immigration.

But in the last few months, the president has argued that Mexico would indirectly fund the structure through the new United States-Mexico-Canada Agreement (USMCA).

 “What we save on the USMCA — the new trade deal we have with Mexico and Canada — what we save on that, just with Mexico, will pay for the wall many times over just in a period of a year, two years and three years,” he said earlier this month.

“So, I view that as, absolutely, Mexico is paying for the wall.”   What have the Democrats said?

Speaking in the Senate last month, Senate Minority Leader Chuck Schumer rejected the idea that Mexico would be footing the bill for the wall through savings from the new trade deal.

“If the president really believed [that], he wouldn't be threatening to shut down the government unless American taxpayers can fund his wall.”

The president’s position on the wall “is totally contradictory, ill-informed, and frankly irresponsible,” he added. What are the facts?

Trade experts and economists have highlighted a number of problems with Trump’s argument.

First, the trade deal, which replaces the North American Free Trade Agreement (Nafta), has yet to be ratified by the legislative bodies in the US, Mexico and Canada.

Democrats, who now control the House, have already voiced criticism of the deal and there is no guarantee that it will be approved.

Even if it is rubber-stamped by lawmakers in all three countries, it wouldn’t come into effect until 2020 at the earliest.

Trump “keeps repeating the ludicrous claim that somehow the revised Nafta will fund his wall even though it remains unclear if the deal will be enacted,” Lori Wallach, director of trade policy for the advocacy group Public Citizen, said in a statement.

The second major flaw in Trump’s claim is that the trade agreement contains no provision that would require Mexico to pay for the wall, either directly or indirectly.

“Trump says the border wall will be paid for through the new Nafta (USMCA),” tweeted Kenneth Smith Ramos, Mexico’s chief negotiator in the trade talks. “That's a chapter you will NOT find in the new agreement, simply because it does NOT exist.”

The president may believe that USMCA will reduce America’s trade deficit with Mexico and will in the long run save the US money, which can be spent on the wall, says Andrew Hunter, senior US economist at Capital Economics.

“However, there is little direct relationship between a country’s trade deficit and government finance,” Hunter told the BBC.

The other possibility is that the deal increases economic activity and could boost government tax revenues.

However, the changes included in the agreement “are relatively minor and unlikely to have much impact on the economy,” Hunter added.

And even if US tax revenues did increase as a result of the deal, those funds could not be directed towards a border wall without Congressional approval, the Washington Post Fact Checker reports.

“It’s hard for any politician to admit they broke a campaign promise,” the paper says. “But no amount of spinning and fuzzy math will obscure the fact that Trump made a promise that he cannot deliver.” Is Trump right?

No. Even if the trade agreement is eventually approved, there are no funds earmarked for a border wall, and any tax revenues raised as a result of the deal would still need to be approved by Congress.

More on Fact check: will Mexico pay for Trump’s border wall?

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