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Trump threatens government shutdown over border wall funding

[WASHINGTON] President Donald Trump threatened Tuesday to bring the US government to the brink of a shutdown if needed to pressure Congress into funding the border wall that was a centrepiece of his 2016 campaign.

Delivering a warning to Democratic lawmakers who have objected to his plans to construct a wall along the US-Mexico frontier, Mr Trump called them "obstructionists" and said that it was time for the US to crack down on illegal immigration.

"If we have to close down our government, we're building that wall," Mr Trump told thousands of supporters gathered in Phoenix for a campaign-style rally.

"One way or the other, we're going to get that wall."

Futures on the S&P 500 Index reversed gains to slip as much as 0.3 per cent as Mr Trump spoke. The yen strengthened, while the Mexican peso weakened 0.2 per cent as the president also said he might terminate the North American Free Trade Agreement at some point.

Mr Trump has asked for US$1.6 billion to begin construction of the wall, with Congress under pressure to pass some kind of spending bill to keep the government open after Sept 30.

But Republicans in Congress haven't shown much appetite for fighting to spend potentially billions more on a border barrier either. The funding would add to the deficit at the same time Republicans are trying to figure out how to pay for tax cuts.

Debt Limit

The issue could also get wrapped up with legislation to raise the federal government's debt limit, which needs to be raised between late September and mid-October to avoid a default. One option being considered by GOP leaders is attaching a debt limit measure to the stopgap spending bill that will likely be considered next month. Under that scenario, Mr Trump's threat to shut down the government over the border wall could entangle the debt ceiling debate.

Senate majority leader Mitch McConnell said Monday in a speech that he sees "zero chance" that Congress won't lift the debt limit. Mr Trump's Treasury secretary, Steven Mnuchin, said at the same event that he will run out of authority to stay under the limit late next month and his priority when Congress returns in early September is ensuring it's lifted.

During his speech, Mr Trump also repeated his call for a historic tax cut. While he provided no details of any planned legislation, he urged congressional Democrats to support it. Democratic senators in states he won should be particularly wary, Mr Trump said. Most Senate Democrats have said they'll refuse to support any tax legislation that provides a tax cut to the highest earners.

"The Democrats are going to find a way to obstruct," Mr Trump said. If so, he told his supporters, they'll be preventing Americans from receiving a "massive tax cut".