MEXICO CITY — U.S. community banks would be worst hit if President Trump's threats to upend the North American Free Trade Agreement or impose a 35% tariff on Mexican imports sparks a trade war.

Lenders in the U.S. farming heartland and across Texas and California could face big losses if Mexico were to slap retaliatory tariffs on U.S. grains to counter Trump's protectionist policies, several bankers and analysts said.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.