Is Trump Undermining the Conservative Commitment to the Free-Flow of Capital by Connecting Immigrant Remittances to Border Wall Funding?

Immigrant-rights protesters at the Republican National Convention on July 20, 2016. (Photo: Julianne Hing)

Is Trump Undermining the Conservative Commitment to the Free-Flow of Capital by Connecting Immigrant Remittances to Border Wall Funding?

Not only would Trump's attack on remittances be cruel and harsh for individuals and families on both sides of the border, it would also not be nearly enough to pay for his ridiculous wall.

More than two years after Trump first boasted, "I will build a great, great wall on our southern border and I will make Mexico pay for that wall," the wall is back in the news. In his October 8, 2017 letter to House and Senate Leaders on Immigration, item 1. A. is the Border Wall, which Trump argues is necessary to protect "our national security and public safety" because the "porous southern border . . . is exploited by drug traffickers and criminal cartels." Though the letter is quite clear about the dangers of not having a wall, it is a bit ambiguous about who is going to pay for the wall, simply arguing that the country must "Ensure funding for the southern border wall and associated infrastructure." As the New York Times appropriately noted, the letter's "proposals, taken together, amount to a Christmas-in-October wish list for immigration hard-liners inside the White House." The gist of the letter is that Trump will make a deal to protect the Dreamers (the DACA program) only if Congress passes harsh immigration policies and funds the wall.

The fact that Trump is backing away from his repeated campaign promises to make Mexico pay for the wall is not exactly news. In a January 2017 phone call, when President Pena Nieto told President Trump, "My position has been and will continue to be very firm saying that Mexico cannot pay for that wall," Trump responded with much less bluster, noting simply "you cannot say that to the press. The press is going to go with that and I cannot live with that." It was a remarkably candid moment that suggested Trump knew that, in the memorable words of former Mexican President Vicente Fox, Mexico was "not going to pay for that f***ing wall." Trump's bombastic rhetoric regarding immigration helped propel Trump to the presidency and it is no small matter that he acknowledged his claim was largely about political optics.

After being pressured to explain during the campaign how he would make Mexico pay for the wall, Trump claimed he would essentially hold remittances sent by Mexican immigrants and by American citizens to family members in Mexico hostage until Mexico agreed to pay for the wall. When asked about candidate Trump's proposal at a press conference, President Obama noted that the implications of ending immigrant remittances are "enormous," highlighting the practical challenges of implementing such a proposal and the impact such a policy would have on pushing more people to leave Mexico for the United States. Going after immigrant remittances would be difficult because not only would senders likely resort to informal channels but selective taxation of money sent to Mexico would raise legal issues because of the discriminatory nature of such a program. It is also unlikely that such a tax on remittances could raise enough money to pay for the wall, a point made by the Cato Institute's Alex Nowrasteh.

Like much of what Trump does, it is hard to know how seriously to take his remittance ransom proposal. For those of us who care about immigrants and their transnational families, Trump's threatened attack on remittances is troubling primarily because of the hardship--most remittances are spent on basic necessities such as food--it would impose on people on both sides of the remittance transfer. But by undermining the free flow of capital, a core feature of our modern globalized world, Trump is also attacking a central component of neo-liberal capitalism. In some respects, this is not surprising, after all, Trump's appeal also rested on his anti-globalization and protectionist trade positions. Trump called NAFTA the "the worst trade deal ever signed in the history of our country," and claimed that globalization "left millions of our workers with nothing but poverty and heartache." But by tying capital flows with labor flows, Trump's proposal arguably destabilizes the global world order when it comes to immigration and capital in unintended ways.

The notion that there is an imbalance between the way we treat workers and the way we treat capital is ordinarily an idea associated with those on the left. One such scholar, Harvard Law Professor Roberto Mangabeira Unger highlighted this imbalance in his 1998 book, Democracy Realized: The Progressive Alternative, "The architects of the new world economic order have built a system in which capital and goods can roam the world while labor remains imprisoned in the nation-state or in blocs of relatively homogeneous nation-states." For Republicans like Trump or Rep. Mike Rogers (R.-Alabama) to link remittances and immigration policy in this way is unusual. As National Public Radio reported in May, "Taxing cash transfers is usually a strategy employed by leftist autocrats," not by conservatives. If Congress decides not to fund the wall, we may discover that NPR was only half right: taxing cash transfers may be an autocratic strategy that crosses ideological lines. Paying for the wall by going after remittances ultimately hurts both immigrant families and conservative's commitment to the free movement of capital.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.