Mexico City has experiencing years of low rainfall, leaving it often unable to supply its citizens with water.

The city, originally built on lakes and wetlands, is now covered in concrete and asphalt. Another factor is that Mexico City loses about 40% of its water through leaks.

The shortages have sent the price of water shooting up. One resident told ABC News that he now spends about 25% of his income on buying water. And in 2024 water was rationed in 284 of the city’s neighbourhoods.

But the problem extends well beyond Mexico City. Water shortages are projected to affect 30 of its 32 states by the year 2050, which is forecast to affect 40-80% of its population.

Despite all of these water shortages, Mexico is being forced to send part of its water supply to the US because of a just over 80-year-old agreement that was negotiated when water was less scarce. The 1944 treaty governs the allocation of water from the Rio Grande and Colorado River. Under the agreement, Mexico must send 430 million cubic metres of water per year from the Rio Grande to the US, and the US agreed to send 1.85 billion cubic metres a year of water from the Colorado River to supply the Mexican border cities of Tijuana and Mexicali.

US president Donald Trump recently threatened additional 5% tariffs on Mexican exports to the US, claiming that Mexico was 986.8 million cubic metres short of delivering water targets set out in the treaty.

While Mexico is facing its worst water crisis in decades, with reservoirs that serve over 23 million people drying up, it continues to be struggle with this water debt to the US.

Now Mexico has agreed to send 65 billion gallons of water (246 million cubic meters) north by the end of January 2026, about a quarter of the debt, in an updated deal that was finalised on December 15, with distribution to Texas starting in January 2026.

Trump and Mexico’s president Claudia Sheinbaum are expected to discuss further steps for Mexico to resolve its water debt by the end of January 2026. Sheinbaum has argued that there has to be recognition that Mexico has experienced years of drought.

How is Mexico coping?

This isn’t a new problem. Mexico City is sinking at a rate of 20 inches a year, with the aquifer that provides 60% of the city’s water over pumped. Back in February 2024, there were concerns that Mexico City might even run out of water in months.

In the town of San Cristóbal, in the southern state of Chiapas, residents have had to travel at least 30 minutes to access water as the taps often run dry, while other residents claim they only have access to water for a few hours a day.

In March 2025 for the first time ever the US refused a request by Mexico to provide water to the border city of Tijuana, which was running out of water. Tijuana is a manufacturing hub just 27 miles south of San Diego, California, which depends on the Colorado River for 90% of its water.

About 97% of the Colorado River basin lies within the US, while about 60% of the Rio Grande runs through the Mexico-Texas border, with the rest running through Colorado and New Mexico.

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Mexico has not consistently adhered to the water agreement since the early 1990s, and the agricultural sector in Texas has struggled to cope without the water being supplied. Texas lawmakers have made this a priority, calling on Trump to apply pressure on Mexico for not complying with the agreement.

And the pressure on Mexico is likely to continue as it must start to renegotiate the US-Mexico-Canada Trade Agreement this year.

It’s not just Mexico that is running out of water, according to a new report by the United Nations.

The report reveals that more than 50% of the world’s large lakes have lost water while 70% of the major aquifers are experiencing long term decline. This is likely to ramp up tension between neighbouring countries over water access, with the Mexico/US conflict being just part of the bigger picture.

Mexico and the US’s growing dispute over water rights further complicates an already strained relationship that must tackle existing challenges related to drug trafficking, security, migration and trade wars. Water is just the latest issue to rise to the top of the tension table.