MEXICO CITY--Mexico put tariffs on American products ranging from steel to pork and bourbon on Tuesday, retaliating against import duties on metals imposed by President Donald Trump and taking aim at Republican strongholds ahead of U.S. congressional elections in November.
Mexico's response further raises trade tensions between the two countries and adds a new complication to efforts to renegotiate the trillion-dollar North American Free Trade Agreement between Canada, the United States and Mexico. American pork producers, for whom Mexico is the largest export market, were dismayed by the move.
Trump last week rattled some of the United States' closest allies by removing an exemption to tariffs on imported steel and aluminum that his administration had granted to Mexico, Canada and the European Union. Meanwhile, Trump economic advisor Larry Kudlow revived the possibility on Tuesday that the president will seek to replace NAFTA with bilateral deals with Canada and Mexico, something both countries say they oppose.
Following news of the new Mexican tariffs, which take effect immediately, the peso tumbled to its weakest level since February 2017, making it one of the worst performers among major currencies. Mexico's retaliatory list, published in the government's official gazette, 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.
A net importer of U.S. steel, Mexico is also putting 25 percent duties on a range of American steel products.
Mexico’s trade negotiators designed the list, in part, to include products exported by top Republican leaders' states, including Indiana, where Vice President Mike Pence was formerly governor, according to a trade source familiar with the matter. Bourbon-producing Kentucky is the home state of Senate Majority Leader Mitch McConnell, a Republican.
The new tariffs could also have political implications in some hotly contested races as the Republicans seek to maintain control of both chambers in Congress in November's election, illustrating the potential perils of Trump's aggressive efforts to set right what he sees as unfair trade balances with allies and rivals.
Iowa, where one incumbent Republican representative, Rod Blum, is seen as vulnerable, is an example of a place where Trump's party could be hurt. The state is the top pork-producing state in the United States and Mexico is its main export market by volume.
“We need trade and one of the things we’re concerned about is long-term implications that these trade issues will have on our partnerships with Mexico and Canada and other markets,” said Iowa Secretary of Agriculture Mike Naig, a Republican. “If our customers around the world start going to other parts of the world for their supplies, that is a serious problem,” he said.
