"Mexico has been stealing the water from Texas Farmers" and "last year the only Sugar Mill in Texas closed" for lack of water, Trump posted to his Truth Social platform.
He claimed that Mexico was violating a 1944 pact under which the United States shares water from the Colorado River in exchange for flows from the Rio Grande, which forms part of the border between the two countries.
"We will keep escalating consequences, including TARIFFS and, maybe even SANCTIONS, until Mexico honors the Treaty," Trump wrote.
The current treaty cycle expires in October and Mexico owes the United States more than 1.55 billion cubic meters, according to the two countries' boundary and water commission.
Mexican President Claudia Sheinbaum said on Thursday her government has been complying with the treaty under ongoing drought conditions, "to the extent of water availability."
She said in a post on social media platform X that her government had sent a "comprehensive proposal" to the US State Department.
"I am sure that, as in other matters, an agreement will be reached."
Washington said on March 20 that it had rejected a request by Mexico for special delivery of water for the first time in response.
Mexico says its lagging deliveries are due to two decades of drought in the Rio Grande basin.
However, US farmers and lawmakers complain that their southern neighbor has waited until the end of each five-year delivery cycle and has been coming up short in the latest period.
The two countries signed an agreement in November aimed at preventing water shortages in parched southern US states with more reliable Mexican deliveries of river water.
Mexico's attempts to comply with the treaty have resulted in civil unrest in the past.
In 2020, farmers in the northern state of Chihuahua seized a dam to prevent the government from supplying water from a reservoir to the United States, leading to clashes between protesters and the National Guard in which one person was killed.
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