Trump plans 5% tariff on Mexican imports over illegal immigration

US President Donald Trump, struggling to stem a surge of illegal immigrants across the southern border, vowed on Thursday to impose a tariff on all goods coming from Mexico starting at 5 per cent and ratcheting higher until the flow of border-crossers ceases.

Trump said in a statement that the tariffs would start at 5 per cent on June 10 then go to 10 per cent on July 1, 15 per cent on August 1, 20 per cent on September 1 and go up to 25 per cent on October 1 unless Mexico takes steps to stop the surge.

Trump's move was a dramatic escalation of his battle to control a tide of illegal immigrants that has increased despite his efforts to build a border wall and take other steps.

The US officials said 80,000 people are being held in custody with an average of 4,500 arriving daily.

"If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the tariffs will be removed," Trump said.

Mexico's deputy foreign minister for North America, Jesus Seade, said on Thursday that it would be disastrous if Trump goes through with his threat to impose the tariffs.

Trump said he was acting under the powers granted to him by the International Emergency Economic Powers Act. He campaigned for election in 2016 on a vow to crack down on illegal immigration and has been frustrated that the flow has increased in recent months.

"Mexico’s passive cooperation in allowing this mass incursion constitutes an emergency and extraordinary threat to the national security and economy of the United States," Trump said in the statement.

"Mexico has very strong immigration laws and could easily halt the illegal flow of migrants, including by returning them to their home countries," he said.

White House acting chief of staff Mick Mulvaney, asked in a conference call with reporters which products from Mexico could be affected by the tariffs, said: "All of them."