Mexico-U.S. tensions escalate after Pena Nieto cancels his trip to Washington and Trump seeks 20% import tax

Reporting from Mexico City —  Mexican President Enrique Peña Nieto has canceled his planned meeting with President Trump over disagreements about who would pay for construction of a proposed border wall between the two countries — advancing a growing diplomatic rift between the U.S. and one of its most important trading partners.

In a tweet, Peña Nieto said his government informed the White House on Thursday morning that the meeting in Washington, planned for next Tuesday, was off.

That announcement came hours after Trump warned the Mexican leader on Twitter to stay home unless Mexico was willing to fund construction of a wall, one of Trump’s main campaign promises.

Trump says meeting with Mexican president would have been ‘fruitless’ »

After the snub from Peña Nieto, a spokesman for Trump said the new president would attempt to pay for the with a 20% tax on imports from Mexico.

White House Press Secretary Sean Spicer said the Trump administration will seek to impose a tax on imports from countries with which the U.S. runs a trade deficit, which includes Mexico. Later, Spicer said the tax was only one option being considered.

It was unclear how Mexico would respond, though analysts said it is likely that Mexico would start by taxing U.S. exporters if Trump’s proposal was enacted.

“Mexico would feel forced to respond, and it would be bad for the U.S. economy and bad for the Mexican economy,” said Christopher Wilson, deputy director of the Mexico Institute at the Wilson Center in Washington.

The rift has huge implications for both countries. U.S. exports to Mexico totaled $236 billion last year while imports from Mexico were $295 billion.

Trump has called for a renegotiation of the North American Free Trade Agreement, which governs an interlocking web of commerce across the continent, but those efforts will be challenged if the two presidents are not on speaking terms.

Mexicans greeted Peña Nieto’s decision with cheers Thursday, saying he had no choice but to bow out of the meeting after Trump’s provocations.

“It was a declaration of war,” said Mexican political analyst Jose Antonio Crespo. “Not a military war, but a diplomatic and economic war.”

“It’s one of the most tense moments in our history,” Crespo said. “We’re not partners anymore, we’re adversaries.”

While a presidential candidate, Trump repeatedly said he would build a border wall — and force Mexico to pay for it.

Peña Nieto has repeatedly said Mexico has no intention of paying for a wall, and he said so again in a video address Wednesday night.

Peña Nieto already was facing pressure to boycott the meeting after Trump signed an executive order Wednesday calling for immediate construction of a border barrier. Many Mexicans viewed the timing of the announcement as a stinging insult because it came the same day that a delegation of top Mexican officials arrived in Washington.

“President Peña Nieto’s cancellation of his trip is an understandable and logical decision given Trump’s comment that he should not come unless Mexico will pay for the wall,” said Maureen Meyer, a Mexico expert with the think tank Washington Office on Latin America. “The United States and Mexico are important neighbors and their relationship should be based on respect, partnership and cooperation — not building walls. Any meeting between the presidents should be based on these principles.”

Though earlier in the week some Mexican politicians and political analysts were insisting Peña Nieto had to go to Washington for the sake of diplomacy, reaction to Trump’s tweets on Thursday was remarkably consistent.

“The uncertainty is over,” tweeted Javier Lozano, a Mexican senator with the conservative National Action Party. “It is confirmed that we will have to deal with an arrogant and ignorant despot in the USA.”

Lozano had a message for the Mexican political class, even those of different ideological strips.

“Close ranks in the face of the tyrant and let us move forward united and firm.”

Mexicans in the street said they were proud of Peña Nieto for taking a stand. Many spoke with new nationalistic fervor.

“Trump wants to see us in the hole,” said Eugenio Arvide, 69. “But we will fight. If you want war, we will go to war.”

Cecilia Sanchez in the Times’ Mexico City bureau contributed to this report.

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UPDATES:

3:09 p.m.: This article was updated to include President Trump’s proposal to tax imports.

11:05 a.m.: This article was updated with additional background and comments from Jose Antonio Crespo and Maureen Meyer.

This article was originally published at 9:05 a.m.