As American President Donald Trump continues his headstrong quest to build a wall along the U.S.-Mexican border, many expect him to use various tactics to strong-arm his southern neighbor into paying for the anti-immigration tool.
Invoking national security could be one of them, Reva Goujon, vice president of global analysis at intelligence firm Stratfor, told CNBC on Friday.
On Thursday, the White House suggested a 20 percent tax on Mexican imports as one means to pay for the wall, estimated to cost $12-$15 billion, adding that a tax was just one solution among a "buffet of options." An import tax is set to pose major economic consequences for Mexico's manufacturing-based economy and U.S. businesses whose bottom lines rely on Mexican imports. Mexico is the U.S.'s third-largest trading partner.
"The main barrier to an import tax like that is that it could be in violation of NAFTA [North American Free Trade Agreement] or WTO [World Trade Organization] rules. And that's where the Trump team could potentially get more creative and declare this border wall as a national security issue," explained Goujon.
If that happens, the matter would have to be referred to units within the Commerce Department to decide whether it actually constitutes a national security issue, she continued.
Trump has called on Mexico to pay for the wall, but President Enrique Pena Nieto has repeatedly emphasized that his country will not do so. The tensions resulted in the cancellation of a summit, scheduled for next week, between the two leaders.
Because the national security clause is where U.S. presidents have the most leverage, Goujon expects Trump to use the provision on a number of other issues as well.
Trump's negotiating tactics may even escalate beyond an import tax, she noted.
"There's an implicit threat that the U.S. still has more room to escalate, up to and including the potential repealing of NAFTA, which Trump technically has the executive authority to do. That comes with political, economic costs and even social costs, especially if we see people mobilize around this issue."