The tariff dispute comes as Canada, Mexico and the USA try to reach an agreement to update the North American Free Trade Agreement in talks triggered a year ago by Trump's discontent with that deal.
Mexico's actions are within the rules of the WTO and NAFTA, Mexican Economy Minister Ildefonso Guajardo told reporters on Tuesday.
The U.S., Mexico and Canada are locked in a contentious renegotiation of the North American Trade Agreement.
The Mexican currency slid for a fourth day on Tuesday, dropping 1.4 percent to 20.3488 in morning trading in NY, the sharpest retreat among major currencies.
But just when it appeared a trade truce between the two economic heavyweights was on the cards, the White House last week warned it would pursue tariffs on $50 billion worth of Chinese imports, as well as impose restrictions on Chinese investments in the United States and tighter export controls.
Mexico is set to elect its next president on July 1 and Andres Manuel Lopez Obrador, a leftist firebrand who has argued for more reliance on domestic production, is firmly in the lead with a margin of as much as 20 percentage points, according to the Bloomberg Poll Tracker.
Other US allies have also reacted with fury and retaliation, with fears building of a global trade war.
"We support the position of the Mexican government to impose the equivalent measure on diverse products", Mexico's Business Coordinating Council said of the retaliatory tariffs.
So the Trump administration's new tariffs on NAFTA partners as well as its goal of adding a sunset provision to NAFTA almost guarantees that fewer companies will allow their supply chains to straddle North American borders. "The prime minister raised the United States decision to apply tariffs to European Union steel and aluminium imports, which she said was unjustified and deeply disappointing", a spokesman for the prime minister told reporters.
The US is Mexico's largest trading partner, receiving about 80 per cent of the country's exports.