Mexico Prepares New Retaliation Duties Against United States

A new round of punitive duties Mexico has prepared for U.S. products to pressure President Donald Trump into lifting his metals tariffs could be ready in the next two to three weeks, a senior official said on Tuesday.

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Mexico imposed tariffs on various U.S. products last year in response to Trump's duties on steel and aluminum, and the government said it could soon swap out some goods from the list for others to spread the pain across the U.S. economy.

Mexican Economy Minister Graciela Marquez said the new measures included economic and political components, when asked if Mexico would target Democratic constituencies to encourage more U.S. lawmakers to argue for an end to the metals duties.

"We are in the process of preparing new retaliation tariffs ... we are not in a position of disclosing the new components," Marquez told reporters in Toronto after talks with Canadian Foreign Minister Chrystia Freeland.

Asked when the tariffs would be ready, Marquez said the list had been finished. But it still needs to go to the finance minister and President Andres Manuel Lopez Obrador, "so it will take at least two or three weeks," she said.

Mexico's push to have the metals tariffs lifted has become bound up with its efforts to secure U.S. ratification of a new trade pact known as the United States-Mexico-Canada Agreement (USMCA), intended to replace the 25-year-old North American Free Trade Agreement.

Mexicans lobbying for USMCA approval have focused their attention more on Democratic lawmakers since Democrats took control of the U.S. House of Representatives in January.

Speaking on condition of anonymity, one Mexican official said any revised retaliatory tariffs would lean more than before toward Democrats' districts to impress on them the need to lift the metals duties, and pave the way for USMCA ratification.

Democrats have said they will not ratify USMCA unless Mexico delivers on a pledge to enact stronger labor provisions. Mexico's Congress passed a law that strengthens the rights of trade unions near the end of last month.

U.S. Republican lawmakers have already signaled that Trump will need to drop his metals tariffs to pass USMCA.

Republican Chuck Grassley, who chairs the Senate Finance Committee, said last month there was no chance of ratifying the new trade pact until the tariffs were gone.

Still, participants in the process said they believed progress was being made toward resolving outstanding disputes.