President Donald Trump, Mexican counterpart Enrique Pena Nieto talk by phone as tensions rise

Following the cancellation, Trump’s spokesman said the White House would seek to pay for the border wall by slapping a 20 per cent tax on all imports from Mexico, as well as on other countries the US has a trade deficit with. The White House later cast the proposal as just one option to pay for the wall.

The strong reaction from Mexico signaled a remarkable souring of relations between Washington and one of its most important international partners just days into the new administration.

The US and Mexico conduct some USD 1.6 billion a day in cross-border trade, and cooperate on everything from migration to drug enforcement to major environmental issues.

Two administration officials who confirmed on Friday’s phone call insisted on anonymity because they were not authorised to discuss it publicly. Trump, who took office without any significant foreign policy experience, has moved swiftly in his first week in office to refocus on what he has deemed an “America First” policy.

His position has left key US allies on edge about their standing with Washington.