As President Donald Trump's latest round of tariffs takes effect, a Web3 startup called Watr is making a bold claim: its blockchain platform can automatically track tariffs on goods coming into and out of the USA. This could be a game-changer for global trade, which has been slowed down by tariff-induced complexities. Watr's platform is already being used by giants like JP Morgan, Citibank, and FEMA to validate commodities, lending credibility to its ambitious claim.

Watr's CEO, Maryam Ayati, a former executive at Shell, BP, and J.P. Morgan, believes her company's technology can make a significant impact. "We will also soon be able to augment reported data with machine-sourced data from satellites, sensors, and open-source repositories," she said in an interview. This would allow for pre-trade tariff validation, ensuring that commodities are checked for tariffs before transactions take place. This could prevent fraudulent activities, such as misrepresenting the destination of goods to avoid paying tariffs.

Ayati cited an example where Watr's platform could make a difference: "Some non-Western governments we've spoken to say that Western-country commodities traders sometimes claim that a commodity they've bought will be going to, for example, Europe, but then it's sent to, for example, an Asian market. And they make a lot more money on that because they don't give the correct cut to the original commodity owners." With Watr's system, the minute tariffs are due, the commodity can be checked for whether a tariff is due or not, even before money changes hands.

The global commodities industry is worth a staggering $20 trillion, making the potential impact of Watr's platform significant. The company's technology tracks commodities using blockchain-based tools, including decentralized IDs for institutions and digital fingerprints for raw materials. Ayati emphasized that Watr's goal is to modernize the global economy's "plumbing," focusing on trust, traceability, and liquidity rather than token hype.

Watr started out in 2022 with a "nutrition label" to track the provenance of commodities in terms of regulations, such as CO2 emissions or other ESG considerations. However, with ESG falling out of favor, the company is now shifting its focus to sanctions and tariffs. Its blockchain platform is designed to test the provenance of commodities, ensuring that clients aren't inadvertently overstepping regulatory hurdles before a trade is even done.

This week, Watr announced its migration to the Avalanche blockchain network, which allows companies to create "sovereign chains" tailored to specific industry needs. This move signals Watr's commitment to scalability and industry adoption. Independent Web3 VC Keld Van Schreven, founding partner of KR1, commented that Watr's plans would have to be tested by the market, but if successful, could mark a significant inflection point for blockchain adoption in global trade.

While Watr's claims may seem bold, the company is not the first to explore blockchain's potential in the commodities trade. In 2017, 'The Seam', an agriculture-focused digital exchange, partnered with IBM to explore blockchain-based cotton trading. In 2018, a group of industry giants backed the komgo initiative, a blockchain-based platform aimed at streamlining trade finance for commodities. However, many of these earlier projects have fallen by the wayside, making Watr's success all the more crucial for the adoption of blockchain in global trade.

As the global economy continues to grapple with the complexities of tariffs and trade, Watr's innovative approach could be a beacon of hope. If the company can deliver on its promises, it could revolutionize the way commodities are traded, reducing fraud and increasing efficiency. The proof, as always, will be in the pudding – but with its seasoned leadership team and significant backing, Watr is certainly worth watching.