The US just lost a trade battle with Mexico. It’s the first loss of the Trump era.
Mexico and the US have fought for years over tuna. The US insists that any Mexican tuna sold in the US must be “dolphin safe,” meaning dolphins weren’t killed by tuna fisherman, which was once common. Mexico says its fisherman play by the rules. The US government disagrees.
On Tuesday, the World Trade Organization ruled in Mexico’s favor, allowing it to impose trade sanctions worth $163 million a year against the US. The WTO says that’s how much money Mexico has lost from the US unfairly penalizing Mexican tuna.
The timing, however coincidental, is sensitive. President Trump wants to renegotiate NAFTA, the free trade agreement between the US, Mexico and Canada.
Trump’s administration took its first steps to crack down on trade with Canada on Monday night when the Commerce Department announced a 20% tariff against Canadian softwood lumber. A war of words between Canadian and American leaders has followed.
Trump’s decision to go after Canada first with tariffs was particularly surprising given his harsh criticism of Mexico on the campaign trail. Now Trump has upset Canada and suffered a trade defeat from Mexico.
Mexican officials insisted for years that US laws discriminated against their tuna, and that other countries didn’t face the same level of enforcement. They argued that they have upheld international standards on commercial fishing and environmental preservation.
Tuesday’s ruling by the WTO ends a case that was first filed by Mexico in 2008.
Mexico’s economic ministry said it would immediately take actions to reclaim the $163 million the WTO said it had lost from the US restrictions. It didn’t say whether its retaliatory actions would be tariffs on US tuna or another product.
