Former Mexican President Vicente Fox challenged U.S. President Donald Trump to go through with his proposal to impose a 20 percent tax on Mexican imports to pay for a controversial wall between the two nations.

"Trump has brought back a very strong Mexican spirit and we’re ready for the trade war, and we’re ready, of course, for not paying (for) that wall," Fox said Friday in an exclusive interview on TODAY.

Trump signed executive orders earlier this week to start construction on the wall, trying to make good on a signature promise he made during his election campaign.

The move prompted Mexico’s current leader, Enrique Pena Nieto, to cancel his scheduled trip next week to Washington.

But Trump has been reluctant to describe how the United States would pay to build the wall, outside of saying he would make Mexico foot the bill. On Thursday, his press secretary floated the idea of using a 20 percent import tax to pay for construction, but the White House later pulled back, calling it one of a "buffet of options" the administration was considering.

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On TODAY, Fox called the tax idea "nonsense," noting it would only hurt the American consumer, something the White House realizes.

"President Trump is playing around with everybody, throwing around smoke balls. It will not work with him. He has now faced his first defeat, and he cannot digest a defeat. His ego doesn’t let him do that," Fox said.

WATCH: “It’s nonsense. He’s playing around with American people.” @VicenteFoxQue on potential 20% tax on Mexican imports. pic.twitter.com/wfuTWpZPK4 — TODAY (@TODAYshow) January 27, 2017

Fox said he doesn't see a diplomatic solution as a possibility and warned that relations with his country have fallen steeply over the issue.

"We are at the very lowest point since the war between Mexico and the United States," he said.

He also cast doubt on the idea that a wider trade war would be sparked if Trump moves forward with its import tax proposal.

"I don’t think he will do it because there is so much to lose for the United States, starting with 10 million jobs, where Mexico is accountable for U.S. citizens, by what we import every year into Mexico — $250 billion," he said. "So the first big loss is 10 million U.S. workers jobs, which he has promised to protect, and he’s doing exactly the opposite."

Fox has been a vocal critic of Trump, his plan for a wall, and racially-charged comments he made throughout the election campaign, particularly his characterization of Mexicans. He has taken to Twitter, Trump’s favorite vehicle to publicly express his thoughts, to criticize the American president and often has posted expletive-laden criticism of Trump’s actions.

Fox called Pena Nieto's decision to cancel his trip to the White House "a wise move" and said his response to Trump has already helped boost the Mexican leader's low popularity ratings.

"This is a big opportunity for President Pena, personally, to recuperate his leadership in Mexico," he said.

Mexico's response has taught Trump "you don’t play around with Mexico," he said.

"We might not be too big, but we are smart and we’re firm, when speaking about solidarity, when we’re speaking about honesty, when we’re talking about dignity."