President Donald Trump touched on two major trade matters back-to-back on Monday, approving the sale of Nvidia chips to China and threatening Mexico with a 5% tariff over water rights.
Trump’s first announcement, made on Truth Social, concerned the sale of Nvidia’s H200 products to China and other countries, which he ultimately approved. He said he informed Chinese President Xi Jinping of the decision personally “under conditions that allow for continued strong National Security” and that Xi responded “positively!”
“$25% will be paid to the United States of America. This policy will support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers. The Biden Administration forced our Great Companies to spend BILLIONS OF DOLLARS building ‘degraded’ products that nobody wanted, a terrible idea that slowed Innovation, and hurt the American Worker. That Era is OVER! We will protect National Security, create American Jobs, and keep America’s lead in AI,” Trump wrote.
He boasted that Nvidia was already moving forward with its new Blackwell and incoming Rubin chips, neither of which would be sold to China. The Department of Commerce is finalizing the terms of the deal, he said, adding that he would take a similar approach to AMD, Intel, and “other GREAT American Companies.”
Trump’s approval of the deal comes after the release of his administration’s bombshell new national security strategy, which departs significantly from that of his first administration, focusing on containing China in favor of a spheres-of-influence-type approach. It was interpreted by many analysts as a step back from previous bellicosity toward Beijing in favor of focusing on the Western Hemisphere, Europe, and the Middle East.
Trump’s next announcement concerned the matter of the United States’s water treaty with Mexico, which has earned his ire.
“Mexico continues to violate our comprehensive Water Treaty, and this violation is seriously hurting our BEAUTIFUL TEXAS CROPS AND LIVESTOCK,” he wrote, saying Mexico still owes the U.S. over 800,000 acre-feet of water to compensate for falling short the past five years, and that 200,000 acre-feet of water must come before the new year.
“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. The longer Mexico takes to release the water, the more our Farmers are hurt. Mexico has an obligation to FIX THIS NOW,” he added.
The matter flared up earlier in the year and triggered threats from Trump, but appeared to be solved under a deal struck in April, which ensured the U.S.’s southern neighbor would meet its obligations as part of the 1944 water treaty. The Department of Agriculture said Mexico committed to transferring water from international reservoirs and increasing the flow of six of the country’s Rio Grande tributaries into the U.S. through the end of the current five-year water cycle, as stipulated under the treaty.
“Mexico finally meeting the water needs of Texas farmers and ranchers under the 1944 Water Treaty is a major win for American agriculture,” Agricultural Secretary Brooke Rollins said at the time. “After weeks of negotiations with Mexican Cabinet officials alongside the Deputy Secretary of State Christopher Landau, we secured an agreement to give Texas producers the water they need to thrive.”
In a press conference shortly after Trump made his first threat of tariffs over the matter on April 10, Mexican President Claudia Sheinbaum acknowledged that her U.S. counterpart was correct in that Mexico had fallen behind on its treaty obligations.
“For Texas farmers who are requesting water, there will be an immediate delivery of several million cubic meters, based on what’s available in the Rio Grande,” she said.
US REACHES DEAL WITH MEXICO TO SECURE MORE WATER FOR TEXAS FARMERS
Sheinbaum also struck an optimistic tone, saying she does not see the matter as a “source of conflict” and her country was “looking for alternatives to comply” with the treaty.
Under the treaty, Mexico is obligated to deliver 1.75 million acre-feet of water from the Rio Grande to the U.S. every five years in exchange for the U.S. sending 1.5 million acre-feet from the Colorado River to Mexico annually.
