Several things are going on here, some obvious and some not so much.
First, the point of cutting aid to Guatemala, Honduras, and El Salvador is to exacerbate the refugee crisis in Mexico — a far wealthier and more powerful country than the three Central American countries near its southern border — and therefore subsequently also at the US southern border.
From the perspective of the authoritarian ethno-nationalists now in control of the Republican party, this is a feature not a bug. An endless stream of “caravans” is good for juicing Fox News ratings and GOP turnout, so win-win.
Second, this is just a particularly hideous example of a much broader pattern within the Trump administration, which is to create a crisis for the purpose of being able to “solve” it. Consider the controversy over funding cuts for the Special Olympics. The White House insisted on the cuts, then blamed “government bureaucrats (aka itself) for the proposed cuts, then trotted out the senile idiot at the head of this circus to take credit for masterfully resolving a completely self-created mini-crisis.
Whether this pattern is a product of some sort of conscious Machiavellian strategy, or a kind of adaptive incompetence, or some combination, will be something for historians to sort out, assuming there are any.
Third, by contrast I’m pretty certain that a certain amount of conscious thought went into designing the Fox News chyron about three Mexican countries. Apparently, after 20+ years of mainlining Fox News, in Trump Country “Mexican” probably means something like what “Muslim” means. That is, there are Honduran Mexicans and Salvadoran Mexicans and Puerto Rican Mexicans, in roughly the same way there are Hindu Muslims and Sikh Muslims and Baha’i Muslims. Etc.
Naturally, it’s “elitist” to make fun of people for being proud of their own ignorance, and doing so will probably cost the Democrats the election. Sorry about that in advance.