US President Donald Trump wants a new 20% tax on all imports from Mexico to pay for a wall on the southern US border, White House spokesman Sean Spicer has told reporters.
Mr Trump wants the measure to be part of a broader tax overhaul package that the US Congress is contemplating, Mr Spicer said.
Explaining how the tax would work, he said: "We have a new tax at $50 billion at 20% of imports - which is, by the way, a practice that 160 other countries do right now."
"Our country's policy is to tax exports and let imports flow freely in, which is ridiculous. But by doing it that way we can do $10 billion a year and easily pay for the wall. Just through that mechanism alone," Mr Spicer told reporters traveling with Mr Trump to Philadelphia.
No further details were available.
The announcement comes after Mexican President Enrique Peña Nieto has said he will not travel to the US for a planned meeting with Mr Trump amid the growing dispute over the wall.
In a series of tweets, Mr Trump said the trade deal with Mexico was one-sided from the beginning and if "Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting".
"This morning we informed the White House that I will not attend the work meeting planned for next Tuesday with the POTUS," Mr PeñaNieto said on Twitter, referring to Mr Trump.
He added that "Mexico reiterates its willingness to work with the United States" in reaching deals that favour both countries.
Mr Trump's executive order directs that existing funding be used to start construction of the wall and orders Congress to pass legislation to further pay for it.
He has pledged that Mexico will refund the US taxpayers' money.
The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers...
— Donald J. Trump (@realDonaldTrump) January 26, 2017
of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting.
— Donald J. Trump (@realDonaldTrump) January 26, 2017
US President Donald Trump has ordered the construction of a wall along the US-Mexico border, but in some places a barrier already exists pic.twitter.com/PsovKKvL95
— RTÉ News (@rtenews) January 26, 2017
At a gathering of Republicans in Philadelphia this evening, Mr Trump said the meeting would have been "fruitless" if Mexico will not agree to treat the US "with respect".
"The President of Mexico and myself have agreed to cancel our planned meeting for next week," Trump said.
"Unless Mexico is going to treat the United States fairly - with respect - such a meeting would be fruitless. And I want to go a different route," he added.
Watch: Donald Trump's ABC News interview
Mr Trump told the Philadelphia gathering that he will strike numerous bilateral trade deals, as opposed to multilateral accords like the Trans-Pacific Partnership, and they would include clauses to allow a 30-day termination notice.
"Believe me, we're going to have a lot of trade deals," Mr Trump said.
"If that particular country doesn't treat us fairly, we send them a 30-day termination, notice of termination."
The President also said he would work against illegal voting, continuing to insist it is a problem in the United States despite a consensus among officials that voter fraud is rare.
"We ... need to keep the ballot box safe from illegal voting," Mr Trump said.
"We are going to protect the integrity of the ballot box and we are going to defend the votes of the American citizen. So important."
Mr Trump said yesterday that he would seek an investigation into illegal voting after being repeatedly challenged over his assertions that he lost the popular vote in the 8 November election to Democrat Hillary Clinton due to voter fraud.
He has not offered evidence to support the claim.
Mexican president 'regrets' US decision on wall
Earlier today, Mr Peña Nieto said: "I regret and condemn the decision of the United States to continue construction of a wall that, for years, has divided us instead of uniting us.
"Mexico does not believe in walls. I have said it time and again: Mexico will not pay for any wall.
"Mexico gives and demands respect as the completely sovereign nation that we are."
Mr Trump gave orders to start work on the wall along the 3,200km border just as a Mexican delegation led by Foreign Minister Luis Videgaray arrived at the White House for talks.
The timing caused outrage in Mexico, with prominent politicians seeing it as a deliberate snub to the government's efforts to engage with Mr Trump.
In response, President Peña Nieto ordered Mexico's 50 US consuls to extend legal help to citizens living in the US.
"Wherever there is a Mexican migrant who needs our help, we should be there," he said.
White House spokesman Sean Spicer said the US will keep the lines of communication open with Mexico and they were looking to reschedule the meeting with Mr Pena Nieto.
US Border Patrol Chief Morgan asked to leave agency
Meanwhile, US Border Patrol Chief Mark Morgan has been asked to step down as the agency moves toward tougher enforcement of immigration laws under the Trump administration, a Department of Homeland Security official told Reuters.
Mr Morgan, a longtime former Federal Bureau of Investigation official, is expected to leave his post by the end of the month, a spokesman for US Customs and Border Protection said.
The border patrol union, which endorsed Mr Trump's presidential campaign and applauded his executive orders, had been critical of Mr Morgan for supporting former President Barack Obama's plans to safeguard certain undocumented immigrants from deportation.
Acting US Customs and Border Protection Commissioner Kevin McAleenan issued a statement thanking Morgan for his service.
"On behalf of the men and women of US Customs and Border Protection and the US Border Patrol, I want to thank Mark Morgan for his unwavering dedication to our border security mission, and recognise his life-long career in service to the nation," the statement said.
