Mexico responded in kind to U.S. President Donald Trump’s metals tariffs by imposing its own duties on American steel on Tuesday, while also targeting politically sensitive agricultural products from pork to bourbon.
Mexico’s peso tumbled to its weakest level since February 2017, leading losses among major currencies due to the rising trade tensions between the two neighbors.
Meanwhile White House economic adviser Larry Ludlow said on Tuesday that Trump is considering a shift in the effort to revamp the North American Free Trade Agreement (NAFTA) by moving to separate talks with Canada and Mexico.
As of Tuesday, Mexico will impose tariffs of 15 percent to 25 percent on U.S. steel products, the Mexican economy ministry said in a list published in the government’s official gazette.
The list also included a 20 percent tariff on U.S. pork legs and shoulders, apples and potatoes and 20 to 25 percent duties on types of cheeses and bourbon. Separately, Mexico opened a tariff-free quota for pork imports from other countries.
Mexico said late last week it would respond to Trump’s tariffs on steel and aluminum with duties on products from congressional districts that Trump’s Republican party is fighting to retain in elections in November. It did not provide exact details of the proposed measures at the time.
Pork exporter Iowa, where incumbent Representative Rod Blum is seen as vulnerable, is an example of a place Mexico’s reaction could hurt Trump’s party.
Trump’s administration imposed tariffs of 25 percent on imported steel and 10 percent on aluminum in March, citing national security grounds. Last week Washington said it was moving ahead with the metals tariffs on imports from Canada, Mexico and the European Union, ending a two-month exemption.
Mexico’s economy ministry said on Monday it will start a dispute settlement process at the World Trade Organization over the U.S. steel and aluminum tariffs, joining the European Union in seeking WTO involvement against the new measures.