WASHINGTON, United States (AFP) — US President Donald Trump plans to fund his construction of a wall on the Mexican border by imposing a 20 per cent import tax on goods from Washington’s southern neighbor, his spokesman said Thursday.

The financing of the project, which is aimed at clamping down on illegal immigration, has sparked tensions between the two countries: Mexican President Enrique Pena Nieto on Thursday called off a visit to Washington set for next week.

“By doing that, we can do $10 billion a year and easily pay for the wall just through that mechanism alone,” Sean Spicer told reporters traveling with Trump aboard Air Force One, as they flew from Philadelphia back to Washington.

The new White House press secretary did not give further details about how the proposed tax would be implemented, or when it would be put in place. But he said it could be part of an overall tax reform package.

“It clearly provides the funding and does so in a way that the American taxpayer is wholly respected,” Spicer said, adding that lawmakers had been made aware of the proposal.

On Wednesday, Trump signed an executive order telling officials to begin to “plan, design and construct a physical wall” along the 2,000-mile (3,200-kilometrr) US-Mexico border, making good on a campaign pledge.