MEXICO CITY, Mexico (AFP) — Tensions between Donald Trump and Mexico’s Enrique Pena Nieto over the US leader’s vow to make Mexico fund a new wall on the neighbors’ border boiled over Thursday with the cancellation of talks in Washington set for next week.

Trump had been scheduled to receive Pena Nieto at the White House on Tuesday, for their first meeting since the inauguration. Instead, the Republican president is managing a foreign policy spat during his first week in office.

The escalating war of words over who would pay for the proposed border wall — a central pledge made by Trump during his successful presidential campaign — hit the breaking point on Thursday.

“If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting,” Trump said on Twitter in the morning.

Pena Nieto didn’t take long to rise to the challenge.

“We informed the White House this morning that I will not attend the working meeting scheduled for next Tuesday” with Trump in Washington, the Mexican leader responded on Twitter.

“Mexico reiterates its willingness to work with the United States to reach agreements in both nations’ interests.”

Hours later, Trump told Republican lawmakers at a retreat in Philadelphia that the cancellation was by mutual agreement.

“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. I have no choice,” he said.

White House spokesman Sean Spicer earlier told reporters that the “lines of communications” would remain open and Washington hoped to “schedule something in the future.”

– Big price tag –

The initial salvos between the two presidents came Wednesday, when Trump ordered officials to begin to “plan, design and construct a physical wall” along the 2,000-mile (3,200-kilometer) US-Mexico border.

Stemming immigration was a central plank of Trump’s election campaign, but he has struggled to articulate how the wall will be paid for, beyond saying “Mexico will pay.”

Republican leaders announced Thursday they would try to carve out $12-15 billion worth of US taxpayers’ money for the project.

Trump also ordered a survey of the border to be completed within 180 days.

Much of the land needed to build the wall would have to be seized from private citizens in Texas, the state of Texas or tribal authorities.

That could result in long court battles and hefty expropriation payments.

– ‘Mexico will not pay for any wall’ –

Trump’s wall order had put Pena Nieto under fierce domestic pressure to hit back, and hit back the Mexican leader did in a video message to the nation late Wednesday.

“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,” Pena Nieto said.

“I have said it time and again: Mexico will not pay for any wall,” he added.

Around two in three Mexicans have a favorable opinion of the United States, according to Pew surveys, but anti-American and anti-Trump sentiment is not uncommon.

Pena Nieto saw his own approval rating slide late last year, after he hosted Trump — then still a White House candidate — in Mexico City.

– NAFTA a ‘one-sided deal’? –

Trump also took to Twitter on Thursday to gripe about the trade gap between Mexico and the United States.

“The US has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers of jobs and companies lost,” he said.

That deficit for the trade in goods is slightly higher than the overall trade deficit — including services — of $49 billion in 2015.

Trump has vowed to renegotiate the 23-year-old North American Free Trade Agreement between Mexico, the United States and Canada.

That renegotiation could provide one way for Trump to claim victory, through increased tariffs on Mexican goods or higher border transit costs.

But it could also risk retaliatory tariffs or blowback from US firms who export $267 billion a year south of the border.

Another threat is to finance the wall by tapping into remittances that Mexican migrants send home, which last year amounted to $25 billion.

Trump has also ordered officials to scour US government departments and agencies in search of “direct and indirect” aid or assistance to the Mexican government and report back within 30 days.

The United States is expected to provide about $134 million worth of assistance to Mexico this year, with much of the spending wrapped up in the “Merida Initiative” to combat drug cartels.