Washington, Apr 26 (IANS): With the World Trade Organisation ruling in Mexico's favour, allowing it to impose trade sanctions worth $163 million a year against the US, the Trump administration lost its first trade battle with the neighbouring nation.

The WTO on Tuesday said that's how much money Mexico has lost from the US unfairly penalising Mexican tuna, CNN reported.

Mexico and the US have fought for years over tuna.

The US insists that any Mexican tuna sold in the US must be "dolphin safe", meaning dolphins were not killed by tuna fisherman, which was once common.

Mexico says its fisherman play by the rules. The US government disagrees.

Now the trade body has slammed the US, ruling in Mexico's favour.

The timing, however coincidental, is sensitive. President Donald Trump wants to renegotiate Nafta, the free trade agreement between the US, Mexico and Canada.

Trump's administration took its first steps to crack down on trade with Canada on Monday night when the Commerce Department announced a 20 per cent tariff against Canadian softwood lumber.

A war of words between Canadian and American leaders has followed.

Trump's decision to go after Canada first with tariffs was particularly surprising given his harsh criticism of Mexico on the campaign trail. Now Trump has upset Canada and suffered a trade defeat from Mexico, CNN said.