Indian Council of World Affairs

Abstract: Mexico-US relations are being tested as the Sheinbaum administration navigates pressure from President Donald Trump across security, migration, and trade, reflected in tariff and threats of military intervention. 

Introduction 

Mexico-US relations are facing challenges as President Claudia Sheinbaum’s administration contends with pressure from President Donald Trump across security, migration, and trade, reflected in tariff and threats of military intervention. This pressure reflects a broader pattern in Trump’s second-term foreign policy, characterised by coercive and highly personalised diplomacy, where tariff and threats of military intervention are used to extract concessions from both allies and adversaries in pursuit of US national security objectives. For Sheinbaum, the challenge lies in upholding Mexico’s sovereignty while accommodating the demands of its powerful neighbour.

The study examines three principal areas of US pressure that are shaping Mexico’s policy choices: security strategy, the management of irregular migration, and efforts to limit China’s economic footprint in Mexico. It analyses both the nature of US demands and the ways in which Mexico is navigating these pressures, particularly in the context of two developments- the upcoming FIFA World Cup 2026, which increases scrutiny over security, and the ongoing review of the United States–Mexico–Canada Agreement (USMCA), which places trade alignment at the centre of bilateral relations.

A.  Security Strategy and Cooperation — Moving Away from the “Hugs, Not Bullets” Strategy (Abrazos, no Balazos)

Security cooperation has long been a contentious dimension of Mexico–US relations. A major source of tension is the growing influence of Mexican drug cartels involved in trafficking illicit narcotics, particularly fentanyl, into the United States, contributing to a sharp rise in overdose deaths, thereby making Mexican cartels a national security concern for the US.

In January 2025, on his first day in office, President Donald Trump signed an executive order designating six Mexican cartels as Foreign Terrorist Organizations (FTOs)[i], intensifying pressure on the Mexican government. The measure can give the US government enormous powers that could violate Mexico’s sovereignty, resulting, for example, in drone attacks or military incursions on Mexican soil[ii].

Mexico however, argues that the drug trafficking problem cannot be viewed solely from a supply-side lens. Mexican authorities note the cartels operating in Mexico derive much of their power from access to firearms. Despite having some of the strictest gun control laws in the region (including only one legal gun store in the country operated by the military), Mexican officials maintain that a large proportion of weapons used by criminal groups are trafficked from the United States. They also emphasise that drug trafficking persists largely because of sustained demand in the United States, which remains one of the world’s largest consumer markets for illicit narcotics. Thus, the issue reflects mutual recrimination.

In 2018, when Manuel López Obrador from the MORENA party (Mexico’s current ruling party) came to power, as part of his ideological project of the Fourth Transformation[iii], he adopted the strategy of “abrazos, no balazos” (“hugs, not bullets”), which emphasised social development programmes rather than direct military confrontation with organised criminals[iv]. His approach brought in discussions regarding amnesty for nonviolent criminals engaged in the drug trade, expanding social programmes, professionalising and building police forces rather than military for internal security, and weighing steps towards legalising marijuana and regulating or licensing poppy production. The aim was to address the root causes of violence, including poverty and marginalisation, rather than relying solely on the use of force against the cartels.

This shift in President Obrador’s security approach came after understanding that increased militarisation and the kingpin strategy[v] done by traditional parties in Mexico (such as PRI and PAN) has historically produced unintended consequences accompanied by allegations of murder, disappearances and human rights violations[vi]. For instance, the kingpin strategy, or the removal of top cartel leaders, often triggered violent competition both within and between cartels operating in Mexico as rival groups attempted to assert control over territories and drug trafficking routes. Consequently, violence escalated, and it spread to new regions — a phenomenon called the “balloon effect”. Recognising these outcomes, President Obrador proposed a change in his security approach.

However, now, amid rising cartel violence and growing pressure from the US, Mexico under President Sheinbaum (from the MORENA party) appears to be reverting to the old security approach[vii]. This shift includes renewed emphasis on targeting cartel leadership through arrests, extraditions, and the elimination of key figures. The pressure on Mexico has been amplified by repeated warnings from Trump that if tangible progress is not made in dismantling cartels and shutting down fentanyl laboratories, the United States may consider deploying “boots on the ground” and drone strikes in Mexico.

This escalation also reflects Trump’s assessment that earlier US assistance to Mexico, through the Mérida Initiative, which focused on equipment, training, judicial reform, and institutional strengthening, as well as the Bicentennial Framework initiated under the Joe Biden administration to address security, public health, and safe communities, has failed to produce the desired results in reducing violence in Mexico. However, analysts caution that Trump’s hard-line approach may exacerbate violence in Mexico. Targeting cartel leaders often leads to fragmentation, fuelling further instability, and moreover, dismantling drug laboratories offers only temporary disruption, as they can be quickly re-established. And unilateral US military action would likely strain bilateral relations and undermine Mexico’s sovereignty.

President Sheinbaum has firmly rejected Trump’s remarks on military intervention.[viii] At the same time, her administration has stepped up enforcement measures to crack down on the elite–criminal nexus, exemplified by initiatives, such as Operation Swarm in the State of Mexico,[ix] and the extradition of organised criminals to the United States. One of the such largest transfers took place on 20 January 2026, when 37 cartel members wanted by US authorities were extradited.[x] In addition, the administration has stepped up operations targeting cartel leadership. The last major operation was carried out against El Mencho, the leader of the Jalisco New Generation Cartel (CJNG), resulting in his death[xi]. His death, however, have sparked retaliatory violence in at least a dozen states in Mexico,[xii] raising serious concerns for Mexico’s internal stability, particularly as it prepares to host the 2026 FIFA World Cup. For Sheinbaum, the central dilemma is that responding to US security demands may risk intensifying violence domestically, while resisting such pressure could strain relations with the US.

Nonetheless, President Sheinbaum has sought to walk a diplomatic tightrope by responding firmly yet cautiously to criticism from Donald Trump, particularly his characterisation of Mexico as an epicentre of violence[xiii]. President Sheinbaum has emphasised that if the United States seeks to assist Mexico in addressing cartel violence, it must also confront factors within its borders, especially the trafficking of firearms into Mexico and the drug demand side. This reflects her broader argument that effectively addressing the drug trade requires a framework of shared responsibility.[xiv]

B.  Addressing Irregular Migration

Irregular migration remains another major point of contention. The United States has long sought greater cooperation from Mexico in curbing unauthorised migration flows through the Mexico–US border. Under Donald Trump, pressure on Mexico intensified as the administration sought to fulfil its campaign promises through hard-line immigration policies.

As a result, during his first term, President Trump came up with the US-Mexico border wall and also introduced the Migrant Protection Protocols (widely known as the “Remain in Mexico” policy), which required asylum seekers arriving at the US border to remain in Mexico while awaiting the outcome of their immigration proceedings in US courts. The policy effectively transformed Mexico into a buffer zone that absorbed migration pressures directed toward the United States. However, in August 2022, Joe Biden’s administration officially terminated the programme following a ruling by the US Supreme Court that allowed its cancellation[xv], reflecting the broader approach of the Democratic Party, which tends to favour more liberal and humanitarian-oriented migration policies. However, after returning to office in 2025, the Trump administration reinstated the Migrant Protection Protocols.[xvi]

The reinstatement of the policy has put renewed pressure on Mexico, effectively turning the country into a holding zone for migrants seeking entry into the United States while they await decisions on their asylum claims in the US courts. Along with this, the US has also sought expanded cooperation from Mexico in receiving deported migrants, including individuals who are not Mexican nationals.[xvii] This arrangement places humanitarian and logistical burdens on Mexico, as migrants from multiple countries may remain stranded within Mexican territory for extended periods.

Detention centres and shelters are facing overcrowding and deteriorating conditions, with many migrants forced to reside in makeshift camps, lacking basic services like food, healthcare, and sanitation remains limited. The pressures on Mexico have been compounded following cuts to the USAID[xviii], which had long played a significant role in supporting civil society organisations and local shelters that provide food, healthcare, and temporary accommodation for migrants. Now with the freeze in funding, NGOs have cut help to migrants in Mexico’s makeshift camps.

In response, President Sheinbaum has increasingly militarised the border with the US by deploying the National Guard to stop irregular migration. The National Guard was created by President Obrador in 2019 primarily as a force to address organised crime and public insecurity; however, it has later been used for migration enforcement under continued pressure from the US. The Sheinbaum administration has maintained and expanded this dual role of the National Guard[xix]. Notably, Trump suspended the tariff on Mexico in February 2025, as Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal migration and drugs.[xx]

On its impact, the migration policies undertaken by the administrations of Claudia Sheinbaum and Trump in tandem have contributed to a decline in illegal crossings across the US-Mexico border. According to data from US Customs and Border Protection, illegal crossings declined sharply from 2,135,005 in 2024 to 443,671 in 2025.[xxi] However, the extent of this “success” remains contested. Analysts argue that such figures primarily reflect capturing only those apprehended, while failing to account for individuals who may have successfully entered the United States undetected.

While for Mexico, President Trump’s immigration policies have put tremendous pressure on the country’s resources, economy and society as it tries to absorb the migrant influx.

Despite cooperation, President Sheinbaum has also carved out a space to condemn the "criminalisation" of migrants and the large-scale immigration raids carried out by the Immigration and Customs Enforcement on Mexican migrants in Los Angeles and across Southern California.

C.  USMCA, China and Triangular Trade Dynamics

Beyond drugs and migration, a third major source of tensions in US–Mexico relations concerns the flow of Chinese goods into the United States through Mexico.

Mexico is integrated into North American supply chains through the United States–Mexico–Canada Agreement (USMCA), which governs trade between the three countries. Moreover, the United States remains Mexico’s largest trading partner, accounting for the vast majority of its exports.

However, by now, despite the distance, China has become the second largest trading partner for Mexico. Chinese exports to Mexico increased significantly, doubling from $35.9 billion in 2017 to over $90.23 billion in 2025. Moreover, Mexico has become the top importer of Chinese-made vehicles and a key hub for Chinese automakers. The Hofusan Industrial Park near Monterey in Mexico is a prime example, housing at least 30 Chinese firms, particularly in the automotive sector, including BYD and Chery.[xxii] Chinese presence is also increasing on Mexican ports, telecommunication and railways, signalling a gradual strategic entry into North America’s supply chains.

On the other hand, for the US, in the context of escalating trade tensions, China’s expanding presence in Mexico has raised serious concerns, as it can circumvent US tariffs and trade restrictions, especially on steel, aluminium and EVs, by taking advantage of Mexico’s position in USMCA, thus getting a backdoor entry to the US markets. By establishing assembly plants in Mexico and adding value to products, Chinese goods can qualify for duty-free access to the US under the USMCA agreement.[xxiii]

To this regard, the United States has increasingly used tariffs, trade pressure and the implicit threat of revising, renegotiating or withdrawing from the USMCA as leverage to push Mexico to limit Chinese economic influence, particularly in strategic sectors such as manufacturing and infrastructure. Moreover, the US Customs and Border Protection (CBP) is intensifying efforts to verify the country of origin for goods, looking for substantial transformation to determine if products are Mexican or merely transit Chinese goods.[xxiv]

For Mexico, addressing the China factor has become increasingly important in the context of the ongoing first joint review of the USMCA since its entry into force. While the United States has also raised concerns over Mexico’s labour reforms (particularly regarding compliance with worker rights obligations), energy policies (which are seen as favouring state-owned enterprises over foreign investors) and judicial reforms[xxv] (particularly concerns over judicial independence, investor confidence and the impartiality of dispute resolution mechanisms), China has now emerged as a central point of contention.

In response to these concerns and in the lead-up to these negotiations, on 10 December 2025, Mexico’s Congress approved a law imposing tariffs of up to 50 per cent on imports from countries with which it does not have a trade agreement.[xxvi] Mexico has justified these measures behind “Plan Mexico” to address the trade deficit and protect Mexican domestic industries. However, analysts argue that the aim is to prevent indirect entry of Chinese goods into Mexico through third countries.

Nonetheless, despite growing US pressure, Mexico has not pursued economic decoupling from China. While it has increased scrutiny over Chinese involvement in sensitive sectors, particularly within the framework of the USMCA, it continues to engage with China in areas aligned with its domestic economic priorities. In particular, Mexico remains reliant on Chinese inputs and technologies across sectors, such as infrastructure, electronics, renewable energy, and manufacturing. Moreover, Mexico and China held high-level talks despite imposing tariffs, with the aim of smoothing bilateral relations[xxvii] and fostering a gradual and careful relationship. This underscores Sheinbaum’s strategy of calibrated engagement.

Conclusion

The Trump administration expects Mexico to play a front-line role in addressing its key national security concerns. This includes curbing irregular migration by strengthening border enforcement, intensifying action against drug cartels (particularly in tackling fentanyl flows) and aligning trade and industrial policies to prevent China from using Mexico as a gateway into the US market under the USMCA framework. These expectations are reinforced through tariffs and threats of military action, signalling that continued partnership is closely tied to Mexico’s responsiveness on these fronts.

The administration of Claudia Sheinbaum in light of Mexico’s deep economic ties with the United States and the ongoing review of the USMCA, largely sought to address Trump’s expectations. At the same time, President Sheinbaum has made it clear that engagement and dialogue to address drug and migration issues will proceed within the framework of four core principles: respect for sovereignty and territorial integrity, shared and differentiated responsibility, mutual trust, and cooperation without subordination.

Simultaneously, President Sheinbaum has also carved out space to push back against Donald Trump’s policies on multiple fronts, including condemning remarks about military intervention in Mexico, criticising US strikes on boats in the Caribbean and intervention in Venezuela as violations of international law, responding firmly to the proposal to rename the Gulf of Mexico, and declining participation in ‘Board of Peace’.

The key challenge for President Sheinbaum lies in calibrating her response to US pressure in a manner that prevents escalation while safeguarding Mexico’s sovereignty and maintaining domestic political support. Nonetheless, despite the occasional diplomatic skirmishes, US–Mexico relations continue to be shaped by pragmatic cooperation, reflecting a shared recognition that stability, security, and economic prosperity on both sides of the border are deeply interconnected.

*****

*Dr. Girisanker S.B. is a Research Associate at the Indian Council of World Affairs (ICWA)
Disclaimer: The views expressed are personal.

References

[i] The White House. “Designating Cartels And Other Organizations As Foreign Terrorist Organizations And Specially Designated Global Terrorists.” January 21, 2025. https://www.whitehouse.gov/presidential-actions/2025/01/designating-cartels-and-other-organizations-as-foreign-terrorist-organizations-and-specially-designated-global-terrorists/.

[ii] Raziel, Zedryk. “Trump after Declaring Cartels Terrorist Organizations: ‘Mexico Is Not Going to like It.’” EL PAÍS English, January 21, 2025. https://english.elpais.com/international/2025-01-21/trump-after-declaring-cartels-terrorist-organizations-mexico-is-not-going-to-like-it.html.   

[iii] Note- The nomenclature of President Obrador’s ‘Fourth Transformation’ comes after the three major historical episodes- the Mexican War of Independence (1810–1821), the Reform War (1857–1861), and the Mexican Revolution (1910–1920). It represents President Obrador's vision for a profound social and political overhaul, addressing systemic issues in security, governance, and social inequality along with emphasising self-sufficiency. 

[iv] “Challenges Before the Mexican President-Elect - Indian Council of World Affairs (Government of India).” Accessed March 20, 2026. /show_content.php?lang=1&level=3&ls_id=10980&lid=6982.

[v] Note- The kingpin strategy is a law enforcement and security approach focused on capturing, extraditing or eliminating the top leaders (“kingpins”) of criminal organizations.

[vi] Jones, Nathan P. “The Unintended Consequences of Kingpin Strategies: Kidnap Rates and the Arellano-Felix Organization.” Baker Institute for Public Policy, January 16, 2013.  https://www.bakerinstitute.org/research/the-unintended-consequences-of-kingpin-strategies-kidnap-rates-and-the-arellano-felix-organization.

[vii] Matamis, Joaquin. “Bullets Not Hugs? Mexico’s New Old Security Strategy • Stimson Center.” Stimson Center, March 9, 2026. https://www.stimson.org/2026/bullets-not-hugs-mexicos-new-old-security-strategy/.

[viii] Lopez, Oscar. “Sheinbaum Rejects US ‘Invasion’ after Trump Orders Military to Target Mexico Cartels.” World News. The Guardian, August 9, 2025. https://www.theguardian.com/world/2025/aug/08/mexico-us-military-invasion-sheinbaum-trump.

[ix] “The Structural Redesign of Security in Mexico | Wilson Center.” December 11, 2024. https://www.wilsoncenter.org/article/structural-redesign-security-mexico.

[x] Office of Public Affairs | 37 Mexican Nationals Wanted for Serious Crimes Transferred to the United States from Mexico, Including Leaders of Foreign Terrorist Organizations | United States Department of Justice.” January 21, 2026. https://www.justice.gov/opa/pr/37-mexican-nationals-wanted-serious-crimes-transferred-united-states-mexico-including.

[xi] “Mexico’s Most Wanted Drug Lord ‘El Mencho’ Killed in Military Operation.” February 23, 2026. https://www.bbc.com/news/articles/cy4wywnrdd8o.

[xii] “Violence Erupts in Mexico after Drug Lord El Mencho Killed.” February 23, 2026. https://www.bbc.com/news/articles/c795qgejzpxo.

[xiii] Graham, Thomas. “Sheinbaum tells Trump: stop illegal arms trade from the US to Mexico.” The Guardian, March 9, 2026.  https://www.theguardian.com/world/2026/mar/09/mexican-cartels-guns-come-from-us-sheinbaum-trump.

[xiv] Lopez, Oscar. “Sheinbaum Tells Trump: Stop Illegal Arms Trade from the US to Mexico.” World News. The Guardian, March 9, 2026. https://www.theguardian.com/world/2026/mar/09/mexican-cartels-guns-come-from-us-sheinbaum-trump.

[xv] “Migrant Protection Protocols (Biden Administration Archive) | Homeland Security.” Accessed March 19, 2026. https://www.dhs.gov/archive/migrant-protection-protocols-biden-administration.

[xvi] “The ‘Migrant Protection Protocols’: An Explanation of the Remain in Mexico Program.” American Immigration Council, n.d. Accessed March 19, 2026. https://www.americanimmigrationcouncil.org/fact-sheet/migrant-protection-protocols/.

[xvii] Refugees International. “Protection, Not Concession: Mexico’s Responsibility to Third Country Nationals Deported by the United States.” Accessed March 19, 2026. https://www.refugeesinternational.org/reports-briefs/protection-not-concession-mexicos-responsibility-to-third-country-nationals-deported-by-the-united-states/.

[xviii] Refugees International. “Mexico.” Accessed March 19, 2026. https://www.refugeesinternational.org/mexico/.

[xix] Raúl Benítez Manaut, “Security, Drug Trafficking, and Migration: Mexico in the Era of Trump 2.0,” Voices of Mexico, no. 126 (Summer 2025). file:///C:/Users/hp/Downloads/BENITEZ%20VOICES%20OF%20MEXICO%20SECURITY%20DRUG-25%20(1).pdf.

[xx] Daphne Psaledakis and David Lawder, “Trump Says Americans May Feel ‘Pain’ in Trade War with Mexico, Canada, China,” Reuters, February 3, 2025. https://www.reuters.com/world/us/trump-says-americans-may-feel-pain-trade-war-with-mexico-canada-china-2025-02-03/.

[xxi] “Southwest Land Border Encounters | US Customs and Border Protection.” Accessed March 20, 2026. https://www.cbp.gov/newsroom/stats/southwest-land-border-encounters.

[xxii] “Chinese Industrial Parks In Mexico, Mexico A Growing Hub For Chinese FDI (And BYD).” Accessed March 19, 2026. https://www.mondaq.com/unitedstates/international-trade-investment/1583716/chinese-industrial-parks-in-mexico-mexico-a-growing-hub-for-chinese-fdi-and-byd.

[xxiii] Brookings. “Is China Circumventing US Tariffs via Mexico and Canada?” Accessed March 19, 2026. https://www.brookings.edu/articles/is-china-circumventing-us-tariffs-via-mexico-and-canada/.

[xxiv] “Marking of Country of Origin on U.S. Imports | U.S. Customs and Border Protection.” Accessed March 19, 2026. https://www.cbp.gov/trade/rulings/informed-compliance-publications/marking-country-origin-us-imports.

[xxv] “Mexico’s Judicial Reforms Lead to Friction with the US And Canada - Indian Council of World Affairs (Government of India).” Accessed March 20, 2026. /show_content.php?lang=1&level=3&ls_id=11886&lid=7216.

[xxvi] “Mexico Approves up to 50% Tariffs on China and Other Countries.” December 11, 2025. https://www.bbc.com/news/articles/c36z43ll06zo.

[xxvii] CGTN. “China, Mexico Discuss Trade in Hopes of Smoothing Bilateral Relations.” Accessed March 19, 2026. https://newsus.cgtn.com/news/2026-02-23/China-Mexico-discuss-trade-in-hopes-of-smoothing-bilateral-relations--1KZ5nGcWwzm/p.html.