"We are going to be doing things militarily," Mr Trump said at the White House on Tuesday, adding that it would be a "big step".
Earlier Mr Trump threatened to cut aid to Honduras amid reports of a "caravan" of asylum seekers heading for the US.
Both of his predecessors in the White House also deployed National Guard troops to help secure the US border.
President Barack Obama sent some 1,200 soldiers to guard the boundary, while President George W Bush deployed about 6,000 troops to help Border Patrol in what was called Operation Jump Start.
During a working lunch with leaders of Baltic countries on Tuesday, Mr Trump told reporters the North American Free Trade Agreement (Nafta) was at risk unless Mexico stopped the flow of migrants.
He tweeted earlier for the third day about the "caravan" of migrants heading north from Central America.
"The big Caravan of People from Honduras, now coming across Mexico and heading to our 'Weak Laws' Border, had better be stopped before it gets there," he tweeted.
"Cash cow Nafta is in play, as is foreign aid to Honduras and the countries that allow this to happen."
The president has been tweeting about illegal immigration for the last few days, accusing Democrats of allowing "open borders, drugs and crime".
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