MEXICO CITY, Mexico – Mexico is considering suspending preferential trade tariffs with the United States in retaliation for mandatory country of origin labeling rules that went into effect at the end of May.

Canada published on June 7 a list of 38 items that could be targeted for retaliatory trade duties.

The dispute hinges on revised COOL regulations that require meat packers to label muscle cuts of meat with information about where each of the production steps occurred. The US lost an appeal of a World Trade Organization challenge to COOL regulations brought by Canada and Mexico in 2012. The WTO Appellate Body said US mandatory COOL regulations violated trade agreements. WTO ordered the US to comply with trade agreements by May 23, but the US revised the rules. Mexico, Canada and anti-COOL groups in the US said the revisions only worsened the situation.

According to a Reuters report, Mexico said it would retaliate if the WTO finds the US government to be in the wrong. Mexico plans to suspend preferential tariffs for a variety of produce items, meat, dairy products and other commodities.