Possible Mexican retaliatory tariff list excludes U.S. corn: sources

MEXICO CITY (Reuters) - Mexico has prepared a list of U.S. products that could be hit in retaliation for possible Trump administration tariffs, with a focus on Republican-leaning agricultural states but excluding corn, one of Mexico’s biggest imports, officials said on Wednesday.

FILE PHOTO: Clouds hover above a corn field in Dubuque, Iowa, U.S., July 26, 2018. REUTERS/Joshua Lott

U.S. President Donald Trump has pledged to apply a first round of tariffs on all Mexican imports next week if President Andres Manuel Lopez Obrador’s government does not stem the flow of mostly Central American migrants seeking entry to the United States.

Mexican officials met with their U.S. counterparts for talks in Washington on Wednesday aimed at reaching a deal to stave off the imposition of U.S. tariffs on Mexican goods.

Four government officials familiar with the situation, speaking on condition of anonymity because of the sensitivity of the matter, said the list, which three of the sources said was prepared by the economy ministry, was with Lopez Obrador’s office.

One source said the president’s office had not made a decision on retaliatory tariffs.

The products targeted are similar to those lined up in response to Trump’s steel and aluminum tariffs last year, and were principally tailored toward hitting the U.S. president’s electoral base, according to one of the sources.

That meant focusing on states that voted for Trump in 2016 where agriculture plays a major role in the local economy, as well as several industrial states, including Michigan, Pennsylvania and Ohio, the source added.

The list submitted to the president’s office excludes U.S. corn, two of the sources said. That could change in due course, one of the sources noted.

Mexico’s growing livestock industry relies on millions of tonnes of U.S.-grown yellow corn annually and industry experts say it would be extremely hard to quickly substitute the American imports with corn from other nations.

While Mexico is self-sufficient in production of white corn, used for the country’s staple tortillas, it has relied for decades on yellow corn imports to feed its cows, pigs and chickens. Tariffs on corn could raise prices for a range of Mexican groceries.

Mexican importers have booked a shipment of 35,000 tonnes of Brazilian corn, an industry analyst said on Wednesday. It would be the first such shipment since January.

Reporting by Frank Jack Daniel, Dave Graham and Anthony Esposito; Editing by Richard Chang and Peter Cooney