Mexican President Enrique Pena Nieto has cancelled a planned meeting with President Donald Trump, signalling a remarkable souring of relations between Washington and one of its most important global partners just days into the new administration.
Escalating a cross border war of words, Trump took to Twitter to publicly upbraid Enrique Pena Nieto.
Videgaray warned that in the end USA consumers would pay it.
Donald Trump talks to ABC anchor David Muir about construction of the Mexican Border Wall.
Stemming immigration was a central plank of Trump's election campaign, although there are still serious doubts about how the project will be funded.
Trump's decision put Pena Nieto under fierce domestic pressure to hit back, and hit back he did in a video message to the nation late Wednesday.
"We are going to be working on a fair relationship and a new relationship" with Mexico, Trump said.
By Thursday morning, Trump' had issued his bareknuckle public response, which may shock diplomats but is in keeping with the mogul's hardball approach to negotiations.
The plan was announced just after the Mexican president cancelled a visit to Washington, amid a row sparked by the question of who will pay for the wall.
Congressman Henry Cuellar on Friday met with Mexican leaders, senators and businessmen in Mexico City to discuss the U.S. -Mexico relations and the importance of trade between the two countries. "But the United States can not continue to lose vast amounts of business, vast amounts of companies and millions and millions of people losing their jobs".
He said that "unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless, and I want to go a different route".
Peña Nieto was scheduled to visit the White House on January 31.
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 neighbor over the past two decades. A planned meeting between Videgaray and U.S. Homeland Security Secretary John Kelly was canceled, a department spokeswoman said.
"With a population of 128 million, Mexico is America's second-largest export market for goods", it said.
Trump himself appeared to pan the idea in a Wall Street Journal interview last week, saying the House border adjustment provision was "too complicated".
In Mexico City, billionaire Mexican businessman Carlos Slim said a united Mexico was ready to help the government negotiate with Trump and called on all political parties to support Pena Nieto in his discussions with the U.S. president. Mexico's government said the USA trade deficit also came up.