Ag Policy Blog

OMAHA (DTN) -- After years of water shortfalls that have cost Texas farmers about $1 billion annually, Mexico agreed late Friday to begin immediate deliveries of water to the United States, averting a 5% tariff threatened by President Donald Trump.

In a statement late Friday, USDA announced Mexico has agreed to release 202,000-acre-feet of water – 65.8 billion gallons -- to the United States with deliveries expected to begin this week.

Trump had initiated plans to raise tariffs on Mexican imports by 5% because of the water dispute. "Mexico continues to violate our comprehensive Water Treaty, and this violation is seriously hurting our BEAUTIFUL TEXAS CROPS AND LIVESTOCK," Trump posted on Truth Social.

Trump said Mexico was not responding to U.S. demands and owes the U.S. at least 800,000 acre-feet of water – roughly 260 billion gallons --- from the 1944 Water Treaty. He had called on Mexico to release 200,000 acre-feet of water before the end of the year. "The longer Mexico takes to release the water, the more our Farmers are hurt. Mexico has an obligation to FIX THIS NOW."

Agriculture Secretary Brooke Rollins credited Trump's involvement in the dispute for reaching a resolution and warned the U.S. reserves the right to impose the 5% tariff if Mexico doesn't uphold its commitments.

"Farmers across South Texas have been reeling from the uncertainty caused by the lack of water," said Agriculture Secretary Brooke Rollins. "Now they can expect the resources promised to them, thanks to President Trump's leadership. I thank Mexico for their willingness to abide by the treaty and return to good standing with their past obligations. Mexico has delivered more water in the last year than in the previous four years combined."

While the moves will win praise from Texas farmers, Mexican farmers have been protesting water releases as well as a proposal to impose new restrictions on water releases to their farms. Just this week Mexican farmers used tractors to block access to the country's Congress. Farmers also blocked roads at the port of entry in Juarez as well.

Under the 1944 Water Treaty, Mexico is obligated to deliver 1.75 million acre-feet over five years to the United States from the Rio Grande River. The United States in turn delivers 1.5 million acre-feet of water to Mexico from the Colorado River. Mexico's persistent shortfalls in deliveries have led to severe water shortages for Rio Grande Valley farmers and ranchers, devastating crops, costing jobs and threatening the local economy.

The challenges with water flows continue as southern Texas and the northern tip of Mexico both have areas along the border in extreme drought conditions according to the North American Drought Monitor.

Texas Gov. Greg Abbott last month called for Mexico to be "held accountable" for breaching the water agreement. Texas officials said the economic losses from lost water deliveries cannot be recovered. Texas A&M University estimated that the Rio Grande Valley suffered $994 million in economic losses in 2023 alone.

"Because of their pattern of neglect, Texas farmers are enduring preventable hardship and an erosion of the agricultural viability of the Rio Grande Valley," Abbott said. "The significant economic loss from Mexico's failure to supply more than two years' worth of water obligations--almost 2 million acre-feet--has had a severe negative impact on Texas' agricultural industry. The breach of the 1944 Water Treaty violates foundational elements of international law and diplomacy and must be corrected immediately."

Texas' only sugar mill, the Rio Grande Valley Sugary Growers Inc., permanently closed in early 2024 because of drought and limited water supplies that were due to Mexico failing to deliver on its obligations under the treaty.

With the agreement, Mexico will release 202,000 acre-feet of water to the U.S. beginning the week of Dec. 15. Timely repayment of the outstanding deficit from the previous water cycle is expected by Mexico. The United States and Mexico are in negotiations to finalize a plan by the end of January 2026.

Mexico and the United States have reached an understanding on water management for the current cycle and the previous cycle's water deficit under the 1944 Water Treaty. A series of actions to meet the treaty obligations have been reviewed, including timely repayment of the outstanding deficit from the previous water cycle, in accordance with the 1944 Water Treaty. The two governments are in negotiations and intend to finalize the plan by January 31, 2026.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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