Trump proposes 20 percent import tax on Mexico to pay for the wall

President Donald Trump plans to pay for the border wall with a 20 percent tax on imports from Mexico, White House Press Secretary Sean Spicer said Thursday. Raising import taxes on Mexican goods would likely cause Mexican companies to pass the costs on to U.S. retailers and businesses by making them pay more for products, thus resulting in higher prices for U.S. consumers.

"By doing [the import tax] we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That's really going to provide the funding," Spicer said. When asked about the costs getting passed along to Americans, Spicer said, "I'm not going to get into it."

Mexico was the United States' third largest supplier of goods imports in 2015, with the U.S. importing $295 billion worth of goods across the southern border. Mexico is additionally the second largest supplier of agricultural imports to the U.S., including foods like avocados as well as beer and wine. Prices on goods from Mexico, including cars, electrical machinery, mineral fuels, and medical instruments, can be expected to go up if such a tax is implemented.

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Trump has suggested raising import taxes before as a means of incentivizing U.S. companies to manufacture goods domestically.

Earlier Thursday, Mexican President Enrique Peña Nieto announced that he had canceled his scheduled meeting with President Trump. Peña Nieto was set to meet with Trump next Tuesday, but after Trump signed an executive order Wednesday to direct federal funds toward building a wall along the U.S.-Mexico border — and reiterated his pledge to have Mexico reimburse the costs of construction — Peña Nieto said his office had informed the White House he would no longer attend the meeting. Jeva Lange

Update 4:42 p.m. ET: Spicer told NBC News' Peter Alexander that the idea of a 20 percent import tax on Mexican goods was simply an "example of options [of] how to pay for [the] wall" and not a concrete policy proposal. The White House has not yet offered a concrete, unqualified plan for how it will fund the construction.