I don't think you can send money to North Korea legally either. Now we don't have an embargo against Mexico but that's basically what this would be.
What he's saying here, kind of sloppily I might add, is that we have leverage against Mexico. He's also failing to acknowledge that they have leverage against us too. Could you force Mexico to pay for the wall? Sure you probably could, is it a good idea to humiliate them in such a way? Probably not as it would cost you a lot more. It's like a giant game of political chicken. Which in my limited knowledge is what trip has always been good at.
To me this discussion can be summarized like this:
Trump: I'm going to build a wall with Mexico
opposition: you can't we won't let you
Trump: I can do it without you it will here is an example how and there are probably 10 other ways if that doesn't work
Opposition: gasp! If you did that it would be a catastrophe
Trump: so then don't stand in my way.
Is this a good thing or a bad thing? Idk, that's for the voters to decide in November.