The U.S. meat industry could face more than $1 billion in retaliatory tariffs from Canada and Mexico under the terms of a new ruling by the World Trade Organization.
In May, the WTO rejected a final appeal from U.S. trade officials and upheld its 2014 finding that "country of origin" labels on meat products put producers in neighboring countries at a disadvantage.
On Monday, the agency ruled that Canada could impose $780 million in tariffs and Mexico could impose $228 million.
Lawmakers implemented COOL standards for meat as part of the 2002 federal farm bill and reauthorized it in the 2008 farm bill.
Under the law, meat producers are required to label where animals were born, raised and slaughtered. It also prohibits including products from different nations in the same package.
Proponents include ranchers in the northern U.S. — who compete with Canada's beef industry — and consumer advocates.
The domestic meat industry, however, argued that the new labels are costly and warned of a potential trade war with Canada and Mexico. Those two nations first objected to the COOL requirements with the WTO more than five years ago.
"We are disappointed with this decision and its potential impact on trade among vital North American partners," said Tim Reif, U.S. Trade Representative general counsel.
Congress is already considering a repeal of the standards.
"We must prevent retaliation, and we must do it now before these sanctions take effect," said Senate Agriculture Committee Chairman Pat Roberts, R-Kansas. "I will continue to look for all legislative opportunities to repeal COOL.”