Mexico to impose sanctions on US exports

Trade wars can't be a good thing right now:
FT.com / Americas - Mexico to impose sanctions on US exports

A long-simmering trade dispute boiled over into sanctions on Monday after Mexico said it would raise tariffs on $2.4bn of US exports in retaliation for ending a pilot programme to allow Mexican trucks on American roads.

The announcement marks one of the first big tests for trade policy under President Barack Obama, who has sought to tread a fine line between assuaging his domestic constituencies and upholding the US’s international obligations.

Mexico said it would increase tariffs on 90 industrial and agricultural goods, likely to include politically sensitive farm products, after Congress last week killed a pilot programme allowing a limited number of Mexican trucks on American highways. Mexico obtained a judicial ruling in 2001 under the North American Free Trade Agreement (Nafta) allowing it to impose such sanctions, but has held off since the US introduced the pilot scheme.