Mexico will defend the free flow of remittances, Finance Minister Jose Antonio Meade said on Monday January 30, reflecting concerns that the government of U.S. President Donald Trump will make it harder for immigrants to send money from the United States.
Trump’s team last year said that stemming the flow of billions of dollars of remittances was one way of pressuring the Mexican government to pay for a planned border wall.
The country’s largest source of cash comes from Mexicans living in the United States. That is now under the microscope after Trump issued an executive order Wednesday to start building a wall on the border.
During his campaign, Trump said multiple times that Mexico will pay for the wall. He even threatened to halt or tax cash transfers — known as remittances — from the U.S. to Mexico if the country refused to pay for it.
But experts caution that even if Trump halts or taxes remittances, Mexicans will still find ways to get cash over the border without paying a tax.
Alberto Ramos, head of Latin America research at Goldman Sachs (GS), says that when wire services charged high fees a decade ago, Mexicans still got their money across the border either in-person, through the mail or via traveling relatives.
“If you tax that money it won’t necessarily stay in the U.S. It can still go to Mexico through informal channels,” says Ramos.
