Trump Squeezes Water, Cartels Hijack Unions, and Mexico Turns Protectionist
Mexico Decoded’s weekly briefing makes sense of the news that matters
1. Water Treaty Under Threat
Mexico agreed to deliver 9 billion cubic feet of water to the U.S. after President Trump threatened to impose an additional 5% tariff on Mexican exports if it failed to comply.
Decoded:
The two countries are bound by a 1944 bilateral water treaty that fixes how much water Mexico must deliver from shared border rivers. But climate change and prolonged drought have made those volumes increasingly unrealistic. Instead of renegotiating the terms, Washington is enforcing them through trade pressure—forcing Mexico to absorb the water shortage.
2. Protectionism Meets Party Politics
Mexico’s Congress approved new tariffs of 35% to 50% on selected imports from countries without free trade agreements, effective January 1, 2026. The government argues the measures will protect jobs in sectors like textiles, steel, and autos, where imports are allegedly priced below international norms.
Decoded:
The vote exposed divisions inside the governing coalition. The Workers Party, a junior ally of President Sheinbaum, abstained—signaling discomfort with tariffs that would hit China and other East Asian socialist countries with which it has political ties.
3. Organized Crime Corrupts and Takes Over Unions
Organized crime in Mexico is increasingly infiltrating unions. This allows them, for example, to disguise extortion as union dues and fees. Unions also control businesses such as the movement of materials or cattle, which criminal organizations can stealthily take over, without exposing themselves to the public.
Decoded:
This is a problem for the left-wing government: it needs to confront the issue head on, but it can’t risk damaging unions in the process, some of which represent an important part of its base of support.
4. Chilean Lessons for Mexico’s Opposition
Chile elected José Antonio Kast president, making him the country’s first far-right leader to win democratically. It was Kast’s second run, after losing in 2021.
Decoded:
Kast dropped culture-war rhetoric and ran on a message of national “emergency” driven by crime, immigration, and weak growth. The shift worked. For Mexico’s opposition the lesson is clear: security and economic anxiety, not ideology, are driving voter behavior.
5. A Nation on Pilgrimage
More than 13 million people traveled to Mexico City on December 12 for the feast day of the Virgin of Guadalupe, Mexico’s patron saint —one of the largest annual religious gatherings in the world.
Decoded:
Roughly seven in ten Mexicans identify as devotees of the Virgin of Guadalupe. The turnout is a reminder that faith remains a central pillar of national identity, shaping culture and social cohesion far beyond the church.