Trump also tweeted on Saturday that Mexico would immediately begin buying "large quantities" of agricultural goods from USA farmers, who have been hit hard by his trade war with China and risked a new blow from Mexican retaliation if Trump had imposed tariffs.
Democrats lashed out in all directions at President Trump after he won concessions from Mexico to try to stop the flow of illegal immigrants at the border.
The announcement came just hours after Trump returned from a five-day trip to Europe, during which Mexican and U.S. officials negotiated in Washington.
Trump, who ran for president pushing a tough line on immigration that included denouncing undocumented Mexicans as rapists, had vowed to raise tariffs as high as 25pc unless Mexico - which exports $350 billion in goods each year to the U.S. - takes further action against migrants.
"I would like to thank the President of Mexico, Andres Manuel Lopez Obrador, and his foreign minister, Marcelo Ebrard, together with all of the many representatives of both the United States and Mexico, for working so long and hard to get our agreement on immigration completed!" he said.
USA border officials say they detained more than 130,000 people crossing from Mexico in May - the highest monthly level since 2006. Trump said on Thursday he would decide later this month whether to hit Beijing with tariffs on an additional list of $300 billion in Chinese goods. At just the San Ysidro crossing in California, Mexico had been prepared to accept up to 120 asylum-seekers per week.
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President Trump announced the United States and Mexico have reached an agreement on immigration and tariffs. But business leaders in America had warned against starting a tariff war.
But the deal he announced Friday night, after returning from a trip to Europe, falls short of some of the dramatic overhauls pushed for by his administration.
Mr Trump, who has called the surge in migrants an "invasion", had threatened to keep raising duties up to 25 per cent unless Mexico addressed the problem. Americans imported $346 billion worth of goods from Mexico a year ago, $14.5 billion of which crossed through the Nogales commercial port alone.
Mexico pledged in a joint statement to take "unprecedented steps to increase enforcement to curb irregular migration". More than 144,000 migrants were taken into custody after illegally crossing the border last month, according to data released by U.S. Customs and Border Protection on June 5.
The changes, in part, continue steps the Trump administration was already taking.
The move took direct aim at Mexico's economy, which is heavily dependent on trade with the United States.
The agreement built on previous U.S. -Mexico talks held in March in which Mexico agreed to deploy National Guard forces, the New York Times reported on Saturday, citing people familiar with the talks. Mexico has rejected those offers in the past, but United States officials have said that Mexico was more open to some version of this idea in talks on Thursday.