In a burst of early morning tweets the president said the alternative to funding his hugely controversial wall project would be total separation from Mexico – including making US car companies pull out their factories based on the other side of the frontier, AFP reported.
The threat yet again upped the ante in a political row that has led to a partial shutdown of the US government and seems set to dominate the start to the third year of Trump's presidency.
"We will be forced to close the Southern Border entirely if the Obstructionist Democrats do not give us the money to finish the Wall & also change the ridiculous immigration laws that our Country is saddled with," Trump tweeted.
With the border shut, Trump said he would take US-Mexican relations back to the days before the NAFTA agreement opened free trade across Canada, Mexico and the United States.
That would "bring our car industry back into the United States where it belongs," he said.
Trump did not make any mention of the new free trade agreement, known as the USMCA, which he only recently signed with the two neighboring countries to replace NAFTA and which he has repeatedly praised as a huge boost for American commerce.
$5 billion question
Trump wants $5 billion in funding for a wall along the more than 2,000-mile border, which he says is currently too porous to stop illegal immigration and which he says has become a magnet for criminals, drugs and even terrorists.
Opponents – especially in the Democratic party but also some in Trump's Republican party – say that a physical wall is impractical and that the idea is being used as a political tool to whip up xenophobia in Trump's right-wing voter base.
Both sides have dug in. Democrats refuse to approve funding and the president – who has made hardline immigration polices a centerpiece of his presidency – has retaliated by refusing to sign off on a wider spending bill, leaving some 800,000 federal employees without pay.
Negotiations on lifting that partial government shutdown, perhaps by providing some border security funding, have sputtered out and no new debate is scheduled before next Wednesday.
Experts are divided on solutions to policing the long, often inhospitable border separating the world's biggest economy from the far poorer countries to its south.
Although there is a huge cross-border drug trade and immigrants often enter illegally, many do have genuine claims for asylum.
Central Americans also are already deeply integrated in the US economy, often performing physically demanding, low-pay jobs in construction, agriculture and other vital sectors.
Despite this, Trump has consistently painted the asylum seekers and economic migrants in outlandish terms, raising the specter of rapists, gang members and people with infectious diseases roaming freely across the border.
In November, Trump threatened to close the "whole border" with Mexico if "it gets to a level where we're going to lose control or people are going to start getting hurt."
Trump and media outlets friendly to his administration have latched particularly on to what have become known as the "caravans" – groups of several hundred or even more migrants who walk on epic treks across Central America and Mexico to try and reach the United States.
Although many in the "caravans" are families and people simply desperate for better, safer lives, Trump has portrayed the groups as organized attempts to invade the United States.
In one tweet Friday, Trump warned: "word is that a new Caravan is forming in Honduras and they are doing nothing about it."
As a result, he said, "we will be cutting off all aid" to El Salvador, Guatemala and Honduras, impoverished, often dangerous countries where American assistance aims to boost democracy, human rights, education and security.