Mexico is retaliating for last week's actions that cut off funding for a federal pilot program that allowed a limited amount of cross-border trucking.

Mexico says it will increase tariffs on about 90 U.S. products because the action violates the North American Free Trade Agreement, which was supposed to have opened cross-border trucking in 1995.

The Mexican Economy Department says it will affect about $2.4 billion in trade.

The omnibus spending bill signed by President Obama last week withdraws funds for a demonstration program in which a limited number of U.S. and Mexican carriers were permitted to engage in cross-border long-distance trucking.

However, after President Obama signed the appropriations bill, the Obama administration said that it wants to come up with an alternative approach to cross-border trucking.

Following the announcement by Mexico about increasing tariffs, White House spokesman Robert Gibbs said the administration wants to work with Congress to come up with a plan that would restore that program.

Gibbs says the White House is working with Sen. Byron Dorgan of North Dakota to write a bill that would deal with lawmakers' concerns.

The program had been viewed by the Bush administration as a way to prove the effectiveness of a safety management system devised by the Federal Motor Carrier Safety Administration, as a prelude to fully opening the border.

Under NAFTA, the crossing was supposed to have been opened to border-state traffic in 1995 and to long-distance traffic in 2000. The opening was stalled until 2007, in part by difficult negotiations with Mexico, but mainly by the legislative and legal tactics of U.S. labor, owner-operator and citizen advocacy groups who fear loss of U.S. jobs to Mexican drivers and argue that Mexican trucks will not be safe.

Teamsters General President James P. Hoffa called Mexico's actions an absurd overreaction. "The right response from Mexico would be to make sure its drivers and trucks are safe enough to use our highways without endangering our drivers," Hoffa said. "The border must stay closed until Mexico holds up its end of the bargain."

(See "Appropriations Bill Will Cut Cross-Border Program," 3/11/09, and "Obama Administration to Revisit Cross-Border Trucking," 3/13/09.