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 US congressional elections in November. Bourbon-producing Kentucky and cheese-producing Wisconsin are others.
News agency Reuters said that the retaliatory tariffs could "have political implications in some hotly contested races" in the United States midterm elections in November, in which the Republican Party is seeking to maintain control of both houses of Congress.
China has offered to boost purchases of American goods by about $25 billion this year to fulfill President Donald Trump's desire to shrink the USA trade deficit with the world's second-largest economy, according to two people familiar with the matter.
Chinese officials have indicated the nation is open to buying as much as $70 billion in US exports, the people said.
Mexico is the largest market for USA pork exporters. Certain cheeses and bourbon will be hit with 20% to 25% duties.
The potential economic effect on USA exporters could damage Republican support ahead of November's midterms.
Mexico's list was created to hit at parts of the United States represented by high-profile Republicans, Mexican officials have said, including steel from Vice-President Mike Pence's home state of IN, motorboats from Sen.
"If our customers around the world start going to other parts of the world for their supplies, that is a serious problem", he said.
Meanwhile, Trump advisor Larry Kudlow revived the possibility on Tuesday that the president will seek to replace the trillion dollar North American Trade Agreement (NAFTA) with bilateral deals with Canada and Mexico, a move that both countries say they oppose.
Mexico announced its response to Trump's move last week but it did not provide details of tariff levels or a full list of products at the time.
"These unilateral tariffs, imposed under a false pretext of safeguarding U.S. national security, are inconsistent with the United States' global trade obligations and WTO rules", Canada's Foreign Minister Chrystia Freeland said Friday after her country filed its WTO complaint.
Commerce Secretary Wilbur Ross was in Beijing from June 2-3 for the third round of high-level trade negotiations, which focused on China agreeing to buying more US energy and farming goods, according to the White House.
Other countries that export pork to Mexico have been allocated a collective tariff-free quota of 350,000 tonnes that will remain in effect until the end of this year. This followed the White House's announcement last week that Washington would press ahead with plans to impose the tariffs, which are tied to China's tech sector.
A Canadian government official, speaking on the condition of anonymity to discuss diplomatic relations, said there have always been one-on-one talks as part of the NAFTA negotiations but noted that the trade pact is a three-country agreement and that any resolution would require all three countries to sign on together. One will raise tariffs, a type of tax, causing the other to respond, in a tit-for-tat escalation. Trump and Kudlow are traveling to Quebec this week for a meeting of leaders from seven of the world's leading economies, and several of those officials have expressed frustration at Trump for his protectionist approach to trade.
"The Canadians made an impassioned personal plea to Mnuchin to take the case up with Trump", an administration official said.
What's a trade deficit?