The US could consider imposing trade sanctions on Mexican products if Mexico continues to impose its soft drinks tax, which has affected the sale of US corn syrup to Mexican soft drink producers, a senior Republican senator has said.

Addressing the US Senate, Senator Charles Grassley of Iowa said: "One response to Mexico's unfair and illegal tax on high-fructose corn syrup would be to enact a similar tax on a Mexican product."

Since it was imposes the tax has affectively blocked the sale of US corn syrup in Mexico and Grassley, who sits on  the Senate Finance Committee which oversees trade matters, specifically mentioned the possibility of a US tax on Mezcal, the Mexican liquor.

"So far, I have not pursued this sort of retaliation," Grassley said, but added: "Let me make this very clear. My patience is limited."
 
Mexico last month imposed a 20% tax on soft-drinks sweetened with high-fructose corn syrup, aimed at supporting Mexico's ailing domestic sugar industry. Mexico has also been keen to persuade the US to allow more of its sugar imports into the North American market.