The U.S. President demands that the neighboring country immediately fulfill the 1944 water supply agreement, or tariffs on Mexican goods will reach 30%
This is reported by Finway
Donald Trump has found a new reason for a trade war with America’s largest partner. This time, it’s about water that Mexico is supposed to supply to the U.S. under a treaty signed 81 years ago.
The Essence of the Conflict: A Debt of 73,000
Trump stated on his social media platform, Truth Social, that Mexico is treating American farmers unfairly by violating the water agreement. The President threatens to impose an additional 5% tariff on all Mexican goods if water is not supplied immediately.
The treaty regarding the use of the Colorado, Tijuana, and Rio Grande rivers, signed in 1944, obligates Mexico to supply the U.S. with at least 350,000 acre-feet of water annually from the Rio Grande basin rivers.
According to the U.S. International Boundary and Water Commission, Mexico has under-delivered 73,000 acre-feet of water over the past five years. Under the terms of the treaty, the country must compensate for this debt within the next five years.
Texas: Losses Reach One Billion Dollars
Texas is currently experiencing a drought. Local farmers are unable to adequately irrigate their crops and provide water for livestock due to a lack of water. According to Republican Congressman Jodey Arrington, the shortage of water resources from Mexico has led to losses of $1 billion in irrigated crops in his state alone.
This is not Trump’s first threat. In April of this year, he already warned Mexico about possible tariffs and sanctions if the country did not fulfill its water obligations.
Mexico is the largest trading partner of the U.S. If Trump follows through on his threat, the overall tariff rate on Mexican goods imported into America will rise to 30%.
However, experts doubt the reality of these threats. Currently, the vast majority of Mexican goods are exempt from Trump’s tariffs as long as they comply with the Free Trade Agreement between the U.S., Mexico, and Canada.
But even this agreement is under threat. In July, it is set for review, and the Trump administration has already signaled its willingness to allow the free trade agreement to expire.
Water resources are becoming an increasingly important geopolitical tool. In a world where climate change exacerbates droughts, control over water may be as crucial as control over oil or gas.
What to Expect
Trump is known for his tendency to make sharp statements that are not always realized. However, the water issue between the U.S. and Mexico is real and requires resolution.
If tariffs are imposed, it will affect the prices of many goods in the U.S. — from vegetables and fruits to cars and electronics. For American consumers, this will mean a higher cost of living, and for the Mexican economy, serious losses.
The water issue at the border of the two countries could become yet another precedent for using trade tools to resolve environmental and resource conflicts.