Trump warns of a 5% tariff on goods from Mexico.

President Donald Trump has threatened to impose a 5% tariff on Mexican imports, citing Mexico's non-compliance with the 1944 Water Treaty, which mandates water flow between the two countries. Trump claims Mexico has failed to deliver 800,000 acre-feet of water and demands the release of 200,000 acre-feet by year-end. This tariff threat complicates U.S.-Mexico trade relations, especially as both nations prepare for a review of the USMCA next summer. Currently, a 25% tariff is in place, but exemptions for compliant goods may be extended as negotiations continue.