Mexico has announced it will raise tariffs on 90 U.S. products. The move was retaliation against Congress’s decision to end a pilot scheme allowing Mexican trucks onto U.S. roads.

This disagreement with the U.S.’s third-largest trading partner marks the first major bilateral trade dispute of the Obama administration.

Mexico’s Economy Secretary Gerardo Ruiz Mateos says that Congress’s ruling violates a provision of the North American Free Trade Agreement (nafta) which states that open cross-border transportation should have been in place by 2000. In 2001, Mexico obtained a judicial ruling from nafta allowing it to impose trade sanctions on the United States for not complying with this ruling, but it has not done so until now because of the pilot scheme introduced by George W. Bush.

The pilot scheme was opposed by the Teamsters Union and many lawmakers, ostensibly because Mexican trucks are unsafe. However, a study funded by the U.S. Department of Transportation found that when comparing like with like, many Mexican trucks were safer than American ones.

“This dispute reveals wider concerns on the part of Mexico, our correspondent says,” reported the bbc. “As a presidential candidate, Barack Obama indicated that he would like to renegotiate the nafta agreement, partly in order to protect American jobs.

“The Mexican government is firmly in favor of nafta, which it sees as a major economic boost for the country, and it is determined that the agreement is not altered, unless through formal negotiation, our correspondent adds.”

With the G-20 summit approaching next month, many world leaders are nervously watching the U.S. for signs of protectionism. In a trade war, everyone’s economy loses out.

Another major concern in this issue is that Mexico is not a neighbor the U.S. would be wise to annoy right now. The country is on the verge of a complete breakdown as drug cartels become bolder and more violent. This violence is spilling over into America, and could do more damage in the future. Radical terrorists could even use this chaos to smuggle weapons and people into America. The U.S. needs Mexico’s cooperation to deal with this. After offending Britain, America doesn’t need to damage its relationship with Mexico.

For more information on the situation in Mexico, read our article “Is Mexico About to Collapse?”