Trump Threatens to Tax Payments That Power Latin American Allies

A Republican proposal to tax remittances would deliver an economic blow to some of the US’s poorest neighbors, including a close ally of President Donald Trump.

The bill, presented to the US House of Representatives last week, would levy a 5% tax on remittances for non-citizens and foreign nationals. That’s on top of a roughly 5% to 10% fee already charged on the payments by senders like Western Union Co. and MoneyGram International Inc., services migrants in the US use to send money to family members back home.

The tax would directly hit payments that represent about one-fifth ...