By Reid J. Epstein and David Luhnow 

MEXICO CITY -- Donald Trump, after seeming to ease his rhetoric on trade and immigration, doubled-down on his assertion that Mexico will pay to build an "impenetrable" wall on the U.S. border.

"They don't know it yet, and they're going to pay for it," Mr. Trump said at a rally in Phoenix hours after a meeting Wednesday with Mexican President Enrique Peña Nieto, who told Mr. Trump that his nation had no intentions of underwriting such a project.

On the issue of trade, the Republican presidential nominee did appear to give some room, saying at a joint briefing after the hourlong meeting that he would aim to "improve" the North American Free Trade Agreement, an accord he has long called a disaster.

He also said he would aim to keep manufacturing "in our hemisphere," referring to North America.

On the campaign trail, Mr. Trump has promised to keep jobs in the U.S., punish American companies that move to Mexico and enact steep new tariffs on imports.

Mr. Trump said at the briefing that "we didn't discuss payment of the wall," but called the barrier "a shared objective."

Mr. Peña Nieto, however, said he told Mr. Trump in private that Mexico wouldn't subsidize a border barrier. "At the beginning of my conversation with Donald Trump I made clear that Mexico would not pay for the wall," he wrote on Twitter later Wednesday.

Mr. Peña Nieto's spokesman, Eduardo Sanchez, said Mr. Trump didn't respond to the president's statement, so there was no discussion. Trump spokesman Jason Miller released a statement that didn't mention the wall payment dispute but said "it is unsurprising that they hold two different views on this issue." Mr. Miller didn't respond to requests for clarification.

Mr. Peña Nieto condemned several of Mr. Trump's campaign proposals and his characterization of some illegal immigrants as drug dealers and rapists. "Mexicans felt offended by what was said" during the campaign, Mr. Peña Nieto said.

The Mexican president noted illegal immigration was at a 10-year low, and said economic activity in the two nations benefit each other. He called the Nafta trade pact a boon to the U.S. economy, but said he would be willing to "modernize" it.

The hastily arranged visit comes as Mr. Trump trails Democratic rival Hillary Clinton in polling in each of the 11 battleground states that will decide the general election.

His weakness among Hispanic voters has damaged his standing in Colorado, Nevada and Florida, and made Arizona competitive -- a heavily Republican state where the Clinton campaign opened two offices in August and invested more than $100,000 in field staffers to register voters and boost Democratic turnout.

In his Phoenix speech Wednesday night, Mr. Trump sidestepped the politically vexing question of what to do with the millions of undocumented immigrants already in the U.S. He argued the well-being of Americans, including those who have been the victims of crimes by illegal migrants, are more important.

"Anyone who tells you that the core issue is the needs of those living here illegally has simply spent too much time in Washington," he said.

He also said "it's our right as a sovereign nation to choose immigrants that we think are the likeliest to thrive and flourish and love us," he said.

David Axelrod, the senior strategist for President Barack Obama's presidential campaigns, said Mr. Trump will reap some political benefit merely by standing next to a world leader. But Mrs. Clinton disagreed, saying on Twitter, "Trump just failed his first foreign test. Diplomacy isn't as easy as it looks."

The visit was harshly criticized in Mexico as capitulation to a U.S. candidate who had attacked the country repeatedly on the campaign trail. The meeting was unlikely to help Mr. Peña Nieto improve his approval ratings, which are the lowest of any Mexican leader in two decades, analysts said.

"Peña Nieto had a golden opportunity to speak truth to power and instead he showed weakness, handing the stage to Trump to reaffirm in our faces that yes, there will be a wall," said Sergio Aguayo, an academic at the Colegio de Mexico graduate school in Mexico City.

Messrs. Trump and Peña Nieto described their meeting as polite but blunt. Mr. Trump said it was "a great honor" to be invited to Los Pinos, the official residence of the Mexican president, while Mr. Peña Nieto said Mr. Trump demonstrated his willingness to work with Mexico by visiting the country.

Mr. Trump, reading from notes, said he told Mr. Peña Nieto that Nafta has benefited Mexico far more than it has the U.S. Mr. Peña Nieto said his priority is "to protect Mexicans, wherever they are."

Mr. Trump's revised approach to Nafta comes in stark opposition to the trade policy he has articulated since launching his campaign. During a "60 Minutes" interview last September, he called the trilateral agreement -- Canada is the other signatory -- "a disaster" that "shouldn't exist." Though he said Wednesday that Nafta has benefited Mexico more than it has the U.S., he didn't repeat calls to install tariffs of up to 40% on U.S. companies that relocate to Mexico.

"I think a positive that came out of this was Trump was much less hostile toward Nafta, and free trade in our hemisphere," said Alonso Cervera, chief economist for Latin America at Credit Suisse.

Mr. Trump's campaign announced the trip the night before it took place, and came hours before Mr. Trump was due to deliver a policy speech outlining his immigration policy.

Though restricting immigration has been a signature element of his campaign, Mr. Trump in recent weeks has sought to walk back proposals to create a "deportation force" to remove 11 million illegal immigrants and their U.S.-born children. He said on Fox News last week he would only seek to remove illegal immigrants who have committed crimes.

Mr. Trump's allies say the visit is a move to show leadership on his key domestic policy issue. Republican vice presidential nominee Mike Pence said on CNN the visit marked the "beginning of a conversation" with Mexico, which would be followed by negotiations once Mr. Trump is elected.

Mr. Trump launched his campaign with unflattering comments about Mexican immigrants. In May, Mr. Trump said U.S. District Judge Gonzalo Curiel, who was born in Indiana, couldn't fairly adjudicate civil lawsuits over the defunct Trump University because of his Mexican heritage.

Mr. Trump's approval numbers have suffered among Hispanic voters in the wake of these remarks. While Mitt Romney won support from 27% of Hispanic voters in 2012, Mr. Trump is at near half that level, according to recent polling.

Mr. Peña Nieto also invited Mrs. Clinton to Mexico City. The former secretary of state last met the Mexican president in his country in 2014 and her campaign is "in a regular dialogue with Mexican government officials," a campaign aide said. Mrs. Clinton would speak with Mr. Peña Nieto "at the appropriate time," the aide said.

Before Mr. Trump arrived in Mexico on Wednesday, Mrs. Clinton characterized his trip as an empty gesture amid a long campaign of insulting Hispanic voters. She said American diplomacy "certainly takes more than trying to make up for a year of insults and insinuations by dropping in on our neighbors for a few hours and then flying home again."

"That is not how it works," Mrs. Clinton added during a speech to the American Legion in Cincinnati.

Since installing his third set of top campaign staff since May, Mr. Trump has made direct appeals to Hispanic and black audiences, suggesting that long-term policies favored by Democrats and Mrs. Clinton are directly responsible for crime and unemployment in urban black and Hispanic neighborhoods.

In Mexico City, where Trump piñatas have become a big seller in the past year, the capital's municipal legislative assembly passed a motion Wednesday declaring Mr. Trump "persona non grata." Senators from both the left-wing and conservative opposition also criticized the visit and said Mr. Trump wasn't welcome.

A few dozen protesters gathered at the country's independence monument along a main boulevard in Mexico City to rail against Mr. Trump.

"He's not welcome in Mexico because of the statements he made in the past," said Erick Valdepeñas, a 26-year old lawyer.

Mr. Peña Nieto and his aides had debated in the past how to respond to the real estate mogul, with many aides suggesting he take an aggressive stand against him, according to a person familiar with the meetings. But the president has said he shouldn't take sides in a U.S. election and instead should appear above the fray, that person said.

--Santiago Perez and Hanaa Tameez contributed to this article.

Write to Reid J. Epstein at Reid.Epstein@wsj.com and David Luhnow at david.luhnow@wsj.com

(END) Dow Jones Newswires

August 31, 2016 23:29 ET (03:29 GMT)

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