Mexico Foreign Minister Luis Videgaray walks through events that led to Mexican President Enrique Pena Nieto cancelling his visit to the White House.
(ROUGH CUT - NO REPORTER NARRATION) (SOUND QUALITY AS INCOMING) A diplomatic spat between the U.S. and Mexico over who will pay for a proposed border wall with Mexico flared at the Mexican embassy in Washington on Thursday (January 26) evening. Luis Videgaray, Foreign Minister of Mexico, who had been in Washington to prepare for a meeting between Mexican President Enrique Pena Nieto and U.S. President Donald Trump said the meeting was called off by his boss. Trump had tweeted earlier that it would be better for the Mexican leader not to come if Mexico would not pay for the wall. He said later the meeting was cancelled by mutual agreement. The White House on Thursday floated the idea of imposing a 20 percent tax on goods from Mexico to pay for a wall at the southern U.S. border, sending the peso tumbling and deepening a crisis between the two neighbours. Mexican President Enrique Pena Nieto announced on Twitter around midday that he was scrapping a planned trip to meet with U.S. President Donald Trump, who has repeatedly demanded that Mexico pay for a wall on the U.S. border. Countries like Mexico would not pay such taxes directly. Companies would face the tax if they import products made there into the United States, potentially raising prices for American consumers. The idea is unpopular with retailers and businesses that sell imported goods in the United States. It also has met opposition from some lawmakers worried about the impact on U.S. consumers. Mexico ships 80 percent of its exports to the United States, and about half of Mexico's foreign direct investment has come from its northern neighbour over the past two decades. The United States runs a $58.8 billion trade deficit with Mexico, according to the latest U.S. government figures. But Mexico is also the United States' second-largest export market.