Mexico hits back with $3 billion in tariffs on US products

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The Trump administration used an old trade law from 1962 to justify the tariffs as a national security issue.

CNN said on Wednesday that Trump invoked the War of 1812 in a testy phone call with Trudeau on May 25 about the burgeoning trade row.

"Don't blame Trump. Blame the nations that have broken away" from fair trade practices, Kudlow told reporters at a White House press conference.

The 25 percent tariff on imports of steel and 10 percent on imports of aluminum went into effect on June 1, after a short exemption period for Canada, Mexico, and the European Union.

Mexico has been a valuable trade partner, as it has become a significant source of USA imported crude oil.

Mexico promised retaliatory measures after the US announced it would go forward with its plan to impose steel and aluminum tariffs.

Mexico had signaled last week that it meant to retaliate against the United States steel and aluminum tariffs. That falls short of the US$200 billion over two years that the Trump administration has demanded the Chinese government buy to address a yawning trade imbalance.

He also says he relayed that message to a senior member of the Prime Minister Justin Trudeau's office.

At no point did any Canadian burn down the White House.

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Heriberto Hernández, president of the Mexican Association of Pork Producers (OPORPA), said that he supports the government's decision and didn't expert Mexican pork prices to go up because "there are a lot of alternatives" to US suppliers.

In a radio interview this morning, foreign trade undersecretary Juan Carlos Baker rejected any claim that the tariffs amount to revenge on the United States, charging instead that Mexico was simply acting within its rights. US stocks were trading higher on Wednesday.

Mexico has imposed new import tariffs on USA goods, including pork products.

"His preference now-and he asked me to convey this-is to actually negotiate with Mexico and Canada separately", Kudlow said.

For example, Mexico is the second-largest consumer of US pig meat, making the industry vulnerable to Mexican tariffs.

Adding to the uncertainty is European anger over Trump's decision to pull the United States out of the global nuclear agreement with Iran.

Trade with the particularly important to Mexico because about 80% of its exports go to its northern neighbor whereas only around 16% of US exports come to Mexico.

He denied America's trade policies left it isolated from G7 allies, but warned that Trump would "stick to his guns" at the upcoming summit.

"We do seem to be at a little bit of a Rubicon moment in terms of whether or not the United States is going to fundamentally turn its back on this economic order", said Thomas Wright of the Brookings Institution think tank in Washington.