The United States is making very good progress on trade issues with Mexico, President Donald Trump said on Friday after a meeting with Mexican President Enrique Pena Nieto, but he also repeated a pledge to make the southern neighbour pay for a border wall.

"We're negotiating NAFTA and some other things with Mexico and we'll see how it all turns out, but I think that we've made very good progress," Trump said on Friday after the meeting at the Hamburg summit of 20 large economies.

Pena Nieto, whom Trump called his "friend", added that the meeting would "help us continue a very strong dialogue" on NAFTA.

Disputes over migration, Trump's proposed border wall, which Mexico says it will not pay for, and his claim that free-trade with Mexico costs jobs in the US, have strained relations between the two countries since Trump's election.