March 1, 2019 / 11:18 PM / in a year

UPDATE 2-Mexico eyes fresh U.S. targets for tariffs to pressure Trump over steel

 (Recasts; adds details on investment, USMCA)
    By Adriana Barrera and Dave Graham
    MEXICO CITY, March 1 (Reuters) - Mexico's government on
Friday threatened to slap duties on new U.S. products in
retaliation for the Trump administration's steel and aluminum
tariffs as it seeks to turn up pressure on Washington to exempt
it from the measures.
    U.S. President Donald Trump set tariffs of 25 percent on
imported steel and 10 percent on aluminum last June, prompting
Mexico and other trade partners to hit back. Mexico has
consistently argued that the tariffs only damage commerce within
North America and should be withdrawn.
    Mexican Deputy Economy Minister Luz Maria de la Mora told
Reuters in an interview that if the U.S. government did not
repeal the tariffs, her government would have a revamped list in
its "carousel" of U.S. targets ready in about two months.
    "We're carrying out an evaluation and there are products
from the agricultural sector - we're probably going to bring in
some new ones and take some others out - as well as in the
industrial sector and the steel industry," de la Mora said.
    The value of the goods targeted under the list would remain
equivalent to the impact of the Trump tariffs, de la Mora said,
estimating the damage they caused at $2.7 billion.
    Mexico's previous government retaliated almost immediately
against the metal tariffs, slapping measures on agricultural
goods including pork legs, apples and cheese as well as various
steel products.             
    Even if the value of the goods targeted by Mexico remained
the same, swapping in new products could encourage more U.S.
businesses to lobby Washington against the tariffs.
    The new Mexican government of leftist President Andres
Manuel Lopez Obrador took office in December, and de la Mora
said the country would continue to reject Trump's measures.
    "We should not fall into this protectionist trap," said de
la Mora, who brought years of experience working in
international trade for the Mexican government to the post.
    Noting that Trump had tried to use the metal tariffs as
leverage during the renegotiation of the North American Free
Trade Agreement (NAFTA), de la Mora said now that since a new
deal had been agreed last year, the argument was no longer
valid.
    "Mexico is not a national security threat for the United
States," she said. "This is really important; it really needs to
be understood that Mexico is a partner, Mexico is an ally."
    Known as the United States-Mexico-Canada (USMCA), the new
North American trade deal is still awaiting ratification by
lawmakers in the three countries.
    De la Mora said Mexico's Congress would likely first pass a
new labor bill designed to strengthen the rights of unionized
workers, fulfilling a commitment made with the USMCA deal.
    She expressed hope that law would be approved before the
current session of Congress concludes on April 30. Lawmakers
would likely move on to USMCA ratification during the following
session due to begin in September, she added.
    Uncertainty over Mexico's access to the U.S. market has been
a worry for business, while Lopez Obrador's decision-making and
attacks on the "neo-liberal" policies he said his predecessors
pursued have also left some investors unimpressed.
    Still, de la Mora said that after her meetings with
investors at the World Economic Forum in Davos in January, she
believed levels of foreign direct investment (FDI) "very
similar" to the past few years could be maintained in Mexico.
    "All the companies indicated to me they have faith in
Mexico," she said.
    Mexico's full-year 2018 FDI totaled $31.6 billion,
preliminary official data showed this week.

 (Reporting by Dave Graham and Adriana Barrera; editing by Frank
Jack Daniel, James Dalgleish and G Crosse)
  
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