US president Donald Trump and the Mexican leader Enrique Pena Nieto have spent one hour talking on the phone amid rising tensions over the proposed southern border wall.
Mr Trump and Mr Pena Nieto were supposed to meet in Washington next week, but the Mexican president cancelled the visit on Thursday.
This came after Mr Trump moved forward with plans to construct a wall along the US-Mexico border and have Mexico pay for construction.
Following the cancellation, Mr Trump's spokesman said the White House would seek to pay for the border wall by slapping a 20% tax on all imports from Mexico - as well as other countries with a trade deficit with the US.
The White House later clarified that the proposal was just one option to pay for the wall.
Earlier, Mr Trump aimed a fresh broadside at Mexico over trade and security issues.
The US president wrote on Twitter that "Mexico has taken advantage of the U.S. for long enough", adding: "massive trade deficits & little help on the very weak border must change, NOW!"
Mr Trump has also ordered cuts in federal grants for immigrant-protecting "sanctuary cities" and a boost in the number of border patrol agents and immigration officers, pending congressional funding.
Separately, Mr Trump is set to sign an executive order temporarily halting the flow of refugees into America and stopping all entries from some majority-Muslim nations.
A draft of the order also includes an indefinite ban on accepting Syrian refugees, with the pause in the broader refugee programme extending for 120 days.
Mr Trump campaigned on a pledge to put in place "extreme vetting" procedures, particularly for people coming to the US from countries with terrorism ties.
According to the draft order, the president plans to suspend issuing visas for people from Iran, Iraq, Libya, Somalia, Sudan, Syria or Yemen for at least 30 days.
White House spokesman Sean Spicer said Mr Trump intends to sign the order during a Friday afternoon visit to the Pentagon, along with actions related to military readiness and the National Security Council.
While at the Pentagon, Mr Trump is expected to meet with the Joint Chiefs of Staff and attend a ceremonial swearing-in for defence secretary James Mattis.
Mr Trump has the authority to determine how many refugees are accepted annually. He can suspend the initiative at any time. Refugee processing was suspended in the immediate aftermath of the September 11 attacks, but was restarted months later.
During the last budget year, the US accepted 84,995 refugees, including 12,587 people from Syria. Former US president Barack Obama had set the refugee limit for this budget year at 110,000.
Mr Trump, according to the impending executive order, planned to cut that programme by more half to 50,000.
The draft order said while the programme is suspended, the US may admit people on a case-by-case basis "when in the national interest" and the government would continue to process refugee requests from people claiming religious persecution, "provided that the religion ... is a minority religion in the individual's country".
That suggests this would allow the admission of Christians from Muslim-majority countries.
Donald Trump is expected to move as early as today to stem the flow of all refugees to the US and bar those fleeing war-torn Syria indefinitely, as Mexico's president was said to be considering calling off his visit to Washington.