Donald Trump has defended his heated phone call with Malcolm Turnbull over the refugee resettlement plan, saying he had to be "tough" with countries that were trying to "take advantage" of America.
But White House spokesman Sean Spicer said, despite the President's misgivings about what he tweeted was a "dumb" deal, it remained alive.
Trump addressed the phone call with the Australian prime minister after criticism he had alienated one of America's closest allies.
"When you hear about the tough phone calls I'm having, don't worry about it," Trump said. "Just don't worry about it. They're tough. We have to be tough.
"It's time we're going to be a little tough folks. We're taken advantage of by every nation in the world virtually. It's not going to happen anymore. It's not going to happen anymore."
The Washington Post reported on Wednesday that Trump told Turnbull the refugee swap was "the worst deal ever" and "I don't want these people" during their conversation, meant to last an hour, which ended with Trump hanging up after just 25 minutes. (Turnbull denies he was hung up upon). Trump reportedly said the refugees may include the "next Boston bombers".
"Countries that are allies, a lot of people taking advantage of us, a lot of countries taking advantage of us, really terribly taking advantage of us," Trump said at a separate forum on Friday.
"I have a lot of respect for Australia, I love Australia as a country but we have a problem where, for whatever reason, President Obama said they were going to take probably well over a thousand illegal immigrants who are in prisons."
White House spokesman Sean Spicer said despite the President's dislike for the deal, they would continue to negotiate in good faith.
"He (Trump) does not like it but out of respect for (Turnbull) he is going to allow that the process to continue," he said.
"Under the conditions that have been set that there will be extreme vetting on every single one of those individuals.
"He (Trump) wants to ensure while he has respect for the Australian people, respect for Prime Minister Turnbull, that we do not pose a threat to the American people," he said.
Turnbull responded to Spicer's announcement on Friday morning.
"You just heard his spokesman say we had a very cordial conversation," he said, continuing to refer to the conversation in nothing less than glowing terms," Turnbull told 7News.
"The President made a commitment to honour the deal that was entered into by his predecessor, that's been confirmed now several times.
"It's very important that it goes ahead because it allows us to secure resettlement options for a number of the people on Nauru and Manus."
U.S. leaders have contacted Australian officials to show their support after reports of the aggressive nature of the phone call emerged.
Party elder and one-time presidential candidate John McCain contacted Australia's U.S. Ambassador Joe Hockey in a bid to clean up the mess.
House speaker Paul Ryan said Australia was a "central ally", while Senator Lindsey Graham said the relationship between the two countries remained strong.
"I wish (Trump) would sleep more and tweet less, but that's up to him," Graham told CNN.