The US President told the Mexican leader they were both in a political bind following Mr Trump’s campaign pledge to build a wall to stem illegal immigration, according to a transcript of a phone call made shortly after he took office in January.
Mr Trump has repeatedly insisted that Mexico will pay for the wall, but has provided few details on how that would be achieved.
In the transcript, published by the Washington Post on Thursday, Mr Trump said: “You cannot say that to the press. They are going to say, ‘who is going to pay for the wall, Mr President?’ to both of us, and we should both say ‘we will work it out’.
“It will work out in the formula somehow. As opposed to you saying ‘we will not pay’ and me saying ‘we will not pay’.
“If you are going to say that Mexico is not going to pay for the wall, then I do not want to meet with you guys anymore because I cannot live with that.”
During the call, which came two days after Mr Trump signed the executive order on the wall, the two leaders also discussed drug trafficking and the US trade deficit with Mexico.