Trump wants the measure to be part of a broader tax overhaul package that the US Congress is contemplating, White House spokesman Sean Spicer told reporters on Thursday.

It was not immediately clear how the tax would work. Parts of the proposal that Spicer described resemble an existing idea, known as a border adjustment tax, being considered by the Republican-led US House of Representatives.

“We have a new tax at $50 billion at 20 per cent of imports -which is, by the way, a practice that 160 other countries do right now,” Spicer said.

“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,” Spicer told reporters travelling with Trump to Philadelphia.

The White House later on Thursday said it was not endorsing the border adjustment tax. No further details were available.

News of the tax proposal widens a rift with Mexico which earlier on Thursday scrapped a planned summit between President Enrique Pena Nieto and Trump over the Republican’s demands that Mexico pay for the border wall to stem illegal immigration.

Pena Nieto wrote on Twitter that he was pulling out of the planned meeting with Trump in Washington next week.

He was responding to an earlier tweet from Trump who said it would be better for the Mexican leader not to come if Mexico would not pay for the wall.

Trump later presented the scrapped plan as a mutual agreement.

Addressing Republican members of Congress at a meeting in Philadelphia, he said he and Pena Nieto had agreed to cancel the meeting, adding it would be fruitless if Mexico did not treat the United States “fairly”.

“I’ve said many times that the American people will not pay for the wall,” Trump told the gathering.

“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.”

Trump views the wall, a major promise during his election campaign, as part of a package of measures to curb illegal immigration. Mexico has long insisted it will not heed Trump’s demands to pay for the construction project.

Trump, who took office last week, signed an executive order for construction of the wall on Wednesday, just as a Mexican delegation led by Foreign Minister Luis Videgaray arrived at the White House for talks with Trump aides aimed at healing ties.

The timing of that, and Trump’s reiterated call for Mexico to foot the bill, caused outrage in Mexico, with prominent politicians and many on social media seeing at as a deliberate snub to the government’s efforts to engage with Trump, who has for months used Mexico as a political punching bag.

Reuters