Trump’s Threatened 5% Tariff on Mexico: What It Means for Investors and Businesses in Oman
US President Donald Trump has threatened to impose an additional 5% tariff on imports from Mexico due to a dispute over water allocations along the shared border.
In a post on his Truth Social platform on Monday, Trump accused Mexico of failing to provide the United States with sufficient water, which he claimed is threatening livestock in Texas. This move follows pressure from Texas lawmakers aiming to hold Mexico accountable.
The issue stems from a 1944 treaty that requires Mexico to deliver water from the eastern Rio Grande basin to the US, while the US supplies water from the western Colorado River to Mexico. This arrangement allows both countries to share limited water resources along their border. However, disputes over these allocations have been frequent, especially during drought periods.
Trump stated that Mexico has not met its water delivery obligations over the past five years and now owes nearly 1 billion cubic meters of water. He demanded that approximately one-quarter of that amount be delivered by December 31, with the remaining balance due shortly thereafter.
“As of now, Mexico is not responding, and it is very unfair to our U.S. Farmers who deserve this much needed water. That is why I have authorized documentation to impose a 5% Tariff on Mexico if this water isn’t released, IMMEDIATELY,” Trump wrote.
The 1944 treaty was signed in an era when water was less scarce than it is today. Water from Mexico is crucial for irrigating crops such as citrus in Texas, while some Mexican border states depend on water from the US portion of the Colorado River.
Special Analysis by Omanet | Navigate Oman’s Market
The threatened US-Mexico water dispute and tariff imposition underscore the growing global risks of resource scarcity and geopolitical tensions. For businesses in Oman, this signals the need to diversify supply chains and invest in sustainable resource management to mitigate exposure to international trade disruptions. Smart investors should consider opportunities in water technology, sustainable agriculture, and resource-efficient industries as these challenges drive innovation and demand worldwide.
