It may be highly challenging to isolate U.S. corporations from the activities of criminal cartels, considering these groups pervade industries such as tourism and agriculture. This vulnerability places certain American businesses at risk of penalties. At a religious site in Culiacán, Mexico, centered around Jesús Malverde, known as the ‘narco-saint,’ devotional items such as flowers, candles, and dollar bill offerings can be found. Culiacán is recognized as the bastion of the Sinaloa cartel.
An executive order was signed by President Trump, labeling Mexican drug cartels and other unlawful organizations as foreign terrorists. This move could press American corporations to forsake conducting transactions in Mexico to evade the risk of U.S. sanctions. This potential shift could profoundly impact both nations due to their intertwined economies, as indicated by ex-government officials and analysts.
Mr. Trump’s executive order, signed on Monday, is angled at exerting utmost pressure on Mexico to curb its notorious drug trade. Broadly, the directive empowers the incumbent administration to enforce economic penalties, travel restrictions, and possibly even initiate military actions in foreign nations.
However, the immense intricacy involved in disassociating American interests in Mexico from cartel activities poses a significant hurdle. With Mexico as its top goods trading partner, it is evident that many U.S. corporations have manufacturing plants across the country.
Further complexities arise from the fact that these illicit organizations have extended their influence beyond drug smuggling and human trafficking. They have made inroads into a broad spectrum of the legal economy, ranging from agriculture, specifically avocado cultivation, to Mexico’s tourism industry, a sector worth billions.
Therefore, it becomes incredibly tough to ascertain the absence of American corporates’ interactions with these cartel doings. As remarked by Samantha Sultoon, a high-ranking adviser on policy relating to sanctions and threat finance in the Trump and Biden administrations, this issue isn’t new.
Presidential administrations from both ends of the political spectrum and Congressional members have considered leveraging such tactics in the past, she relayed. Meanwhile, Mexico’s President Claudia Sheinbaum, in a statement responding to President Trump’s order, underscored the country’s commitment to safeguard their sovereignty.
Problems arising from the established presence of cartels in several sectors can have an enormous impact on American businesses. The intertwining of cartel activities with legal economic sectors makes it nearly impossible to ensure that American businesses can operate independently of cartel influences.
Government officials agree about the potential impacts of this situation. The intertwining of American and Mexican economies is undeniable, raising concerns about the effects on both nations’ economic stability.
The action taken by the U.S., through the orders of the former president, seeks to impose forces on Mexico to control its rampant drug trade. But analysts also highlight the widening authority granted to the U.S. administration, including enforcing penalties, imposing travel restrictions, and possibly, international military intervention.
Separating American economic interests present in Mexico from the roots of cartel operations is no easy task. Contributing factors include Mexico’s role as a significant trade partner and the presence of numerous American manufacturing entities operating therein.
Adding further complexity, crime networks are no longer confined to their notorious trades; they have integrated themselves within legitimate businesses. In essence, ensuring the detachment of American industries from Mexico’s cartel operations is extremely arduous due to the vast influence these organizations have on Mexico’s economy.
Should this situation persist, American companies may have no other choice but to reconsider their operations in Mexico, potentially disrupting their businesses and the economies of both countries. The extensive influence of cartels on various legal sectors of the Mexican economy makes this an intricate issue of international trade and business.
Appealing to both sides of the aisle, the issue has been equally considered by different political groups over time. This includes those who have held position during both Trump and Biden administrations, reflecting the universal concern this issue raises.
In strong response to the move by the U.S., Mexican President Claudia Sheinbaum issued a firm statement, emphasizing the defense of Mexico’s sovereignty.