The New War on Drugs

Between January 20 and February 1, U.S. President Donald Trump signed several executive orders declaring national emergencies on the U.S. southern and northern borders, thanks, in part, to the “the sustained influx of illicit opioids and other drugs” into the United States. Citing the public health crisis created, in particular, by fentanyl—as well as concerns about undocumented migrants—he then imposed a 25 percent tariff on most imports from Canada and Mexico and a ten percent tariff on Chinese goods. Although Canada and Mexico managed to negotiate a monthlong postponement of their new tariffs, in early February the tariff on Chinese imports went into effect.

These showy moves should not come as a surprise. Throughout his 2024 presidential campaign, Trump focused on the threats posed by the illicit drug trade, promising to “end the drug war” by executing drug dealers. He vowed to punish countries responsible for manufacturing and smuggling drugs and the chemicals used to make them with tariffs and other retributions. After the November election, his pick for “border czar,” Tom Homan, pledged to send special operations troops to Mexico to “take out” drug cartels—a threat that other Republican politicians and Trump associates also made throughout 2024.

Trump is right to focus on the drug crisis. Opioids, predominantly fentanyl, have killed more than half a million Americans since 2012. During the epidemic’s worst two years—2021 and 2022—more than 100,000 people in the United States died annually from drug overdoses. But many of the president’s proposals are fraught with grave risks. Along with threatening tariffs and military strikes against Mexico, Trump launched a process to designate drug cartels and other criminal organizations as foreign terrorist organizations; the full list of FTOs will be announced in the second half of February. Presidents Barack Obama and Joe Biden—as well as Trump himself, during his first term—already considered such a designation and decided against it, realizing that it would do more harm than good.

The threat to apply tariffs and FTO designations did create leverage to pressure the Mexican government to resurrect its own law enforcement efforts and collaborate more closely with U.S. law enforcement, two shifts that were sorely needed. But the actual implementation of the tariffs for a substantial time—and the application of the FTO designation—will harm the U.S.-Mexico relationship as well as the U.S. economy. Resorting to unilateral military strikes against the cartels would constitute a death blow to cooperative law enforcement efforts between the United States and Mexico.

When it comes to Canada, the Trump administration’s heavy-handed approach jeopardizes the existing law enforcement collaboration that the United States needs to strengthen. And placing punitive tariffs on China needlessly resets the clock with Beijing; collaboration between U.S. and Chinese law enforcement had, in fact, begun to make some real progress in 2024. If Trump’s administration really wants to weaken the criminal networks that pump lethal drugs into the United States and and generate a wide variety of other threats—and the damage that opioid use disorder causes to the country’s public health, national security, economy, and productivity—it must calibrate its threats and actions much more carefully.

DEADLY EMBRACE

Improving access to overdose medication and medication-based treatment remain a policymaker’s most effective tools to reduce the costs of drug use to public health and the economy. But strong law enforcement cooperation between the United States and supply and transshipment countries is essential, too. Two major Mexican drug cartels—the Sinaloa Cartel and Cártel de Jalisco Nueva Generación—account for a very large portion of the traffic in fentanyl, methamphetamine, cocaine, and other illicit drugs into the United States. Given that these groups have also deeply infiltrated the Mexican government and economy and thoroughly debilitated the rule of law, however, they also threaten U.S. national interests in many more indirect ways.

During Felipe Calderón’s tenure as Mexico’s president, from 2006 to 2012, U.S. law enforcement agents based in Mexico could partner up with their Mexican counterparts to do intelligence gathering, operation design, anticorruption investigations, and institutional reforms. These collaborations clocked real successes in degrading the power of Mexican criminal groups, but violence continued to escalate. Reducing it was a critical priority, but that had to be done without handing the country over to the narcos. 

Yet that’s effectively what Mexican President Andrés Manuel López Obrador did. Beginning in 2019, López Obrador gutted and hamstrung this law-enforcement cooperation—at the same time as the two predominant Mexican cartels were fast replacing China as the leading suppliers of fentanyl to the United States. His “hugs, not bullets” approach to Mexican criminal syndicates only worsened the country’s criminality and violence. It encouraged Mexican law enforcement to focus on sporadic high-value arrests and drug lab busts to placate the United States instead of tackling the cartels systematically. The cartels’ power to intimidate, intrude on legal businesses, and impose criminal rule over swaths of the country expanded significantly.

Mexican cartels gravely threaten U.S. supply chains.

Biden tried to encourage Mexico to strengthen its law enforcement efforts, but his administration’s sotto voce approach drove little productive change. And the United States did not dare push Mexico too hard on the cartels because it needed the country’s cooperation to stem migration flows. Washington was also unwilling to jeopardize its economic ties with Mexico as it worked to decouple its supply chains from China. López Obrador persistently used his ability to increase or decrease law enforcement cooperation on migration as leverage to deflect Washington’s demands for stronger law enforcement action against the cartels.

The Biden administration did intensely target the Chapitos, a group that heads one branch of the Sinaloa Cartel, by persuading Mexico to arrest some of its top leaders and hit men. This may have motivated the Chapitos to export less potent fentanyl in 2024 to the United States, helping reduce lethal overdoses. But the cartels diversified into a wide variety of other activities, such as human smuggling and trafficking, illegal logging and fishing, wildlife trafficking, cyberscams, and the imposition of extortion fees onto much of Mexico’s economic activity and daily life.

As the cartels infiltrate and take over legal businesses in Mexico, their activities directly threaten U.S. interests. In 2024, the United States and Mexico traded around $800 billion in goods and services, making Mexico the United States’ largest trading partner. The cartels’ hijacking of trucks and the blockading of ports of entry, however, are now jeopardizing the safety of U.S.-Mexican supply chains, which in turn gravely imperils the U.S. strategic objective to de-risk its supply chains from dependence on China.

FATAL DOSE

In June 2024, Mexican voters elected Claudia Sheinbaum—López Obrador’s handpicked successor—to be their president. Unlike López Obrador, however, Sheinbaum has expressed interest in restoring a more meaningful collaboration with the United States against cartel activity, for instance by refocusing law enforcement on the entire structures of Mexican criminal groups, not just their top commanders. Washington cannot afford to waste this precious opportunity.

On Trump’s first day in office this January, he signed an order tasking the executive branch to designate some cartels and criminal groups as foreign terrorist organizations As of February 12, the State Department’s working list included six Mexican groups: the Sinaloa Cartel, Cártel de Jalisco Nueva Generación, the Northeast Cartel, La Familia Michoacana, Carteles Unidos, and the Cartel del Golfo. On the surface, this might seem like a strong move. “Trump’s decisive action on cartels,” an analyst wrote in an op-ed in The Hill, “already makes his presidency one of the most consequential in a generation, even if he accomplishes nothing else for the next four years.”

Press coverage of the FTO designation has emphasized the authority it would give the president to order U.S. military strikes on Mexican soil, but this is not the most meaningful way in which it empowers the U.S. government. Previous presidents have launched military strikes on groups such as the Houthis in Yemen without an FTO designation. Rather, the designation expands the U.S. Department of Defense’s ability to gather intelligence on an organization and can encourage U.S. prosecutors to investigate and charge a much wider range of cartel associates in both Mexico and the United States—including middle managers such as logistics staff, money launderers, and people who supervise hit men.

Targeting cartels with FTO designations and threatening tariffs, however, would be valuable leverage only if Trump asks for the right responses from the Mexican government. Asking Mexico to completely halt all fentanyl flows across the U.S. border is an unachievable demand. The Trump administration also risks being too easily placated by anti-migration measures or occasional strikes against individual cartel leaders or labs. And if the designation became a steppingstone to launching flashy unilateral military strikes on Mexican soil, the battle against fentanyl smuggling would suffer a tremendous setback. For one thing, Mexico would consider this act an invasion, and whatever law enforcement cooperation that does exist would grind to a halt. Moreover, such strikes would almost certainly fail to destroy the cartels; replacements for leaders who were killed would quickly be found in the cartels’ thick middle-management layer. The cartels have repeatedly demonstrated a capacity to re-create damaged drug labs within days.

Designating cartels as terrorist groups will fail to destroy them.

Threatening to apply an FTO designation was vastly more useful than actually applying it because implementation carries so many risks. The FTO designation also has a broad clause making it illegal to knowingly provide material support to a designated group. That carries huge drawbacks for the United States. Providing even a pencil, a toy, or a cup of coffee can trigger severe criminal and financial penalties. It does not always matter if a person or company was forced to provide an FTO-designated group support; paying extortion fees under the threat of death would also violate the clause. If Mexican drug cartels are hit with an FTO designation, U.S. companies that do any business with Mexican firms that pay extortion fees would immediately have to cut their ties with these firms or risk prosecution. And the designation has no territorial limitation. The Justice and Treasury Departments could investigate, prosecute, and sanction any entity in the world that deals with FTO-designated cartels.

The designation could also significantly reduce the flow of remittances into Mexico from the United States, which in 2023 amounted to $63.3 billion, or some five percent of Mexico’s GDP. Financial institutions may refuse to process remittance payments out of fear that some of the money will end up in the cartels’ hands—and put them on the hook, legally speaking. But Mexicans living in the United States will continue to send remittances, so a far greater proportion of the payments will likely begin to flow through Chinese underground banking systems.

Given how widespread extortion is in Mexico—and that tens of thousands of people there work for cartels, either willingly or under duress—the designation would dramatically dampen U.S. trade with the country if the United States resorts to mounting large-scale prosecutions. Deepening, not hindering, trade with Mexico is a crucial component of any effort to de-risk American supply chains. Inward-looking and autarky-inclined, the Trump administration may assume that it doesn’t matter if these trade links are severed. But U.S. automakers, supermarket chains, medical service providers, and many other businesses—as well as American consumers—will notice as they are forced to pay higher prices, cope with disruptions in supply, and source goods elsewhere. China would undoubtedly take advantage, strengthening its trade and influence with Mexico. And U.S. gunmakers as well as many American individuals—from money launderers to drug dealers—could also be charged with terrorism in what may easily become a massive legal mess.

A POINTLESS PRESCRIPTION

A similar dynamic applies with China. Trump is wielding a big stick, presenting the country as intransigent, when there is evidence that a more nuanced approach that involves collaboration can yield fruit. In fact, during 2024, U.S.-Chinese counternarcotics collaboration picked up significantly after years of virtually no cooperation. In 2018, bilateral bargaining between Beijing and Washington led China to put the entire class of fentanyl-type drugs under strict legal controls, in the expectation that the United States would reduce its tariffs on China. When even the Biden administration did not dial tariffs back and amped up its competition with Beijing in many strategic domains, China ended all law enforcement cooperation.

But by the end of 2023, adroit U.S. diplomacy had resurrected counternarcotics cooperation between the two countries. China imposed new legal restrictions on the manufacturing, sale, and export of dozens of chemicals, including various substances that can be synthesized into fentanyl and nitazenes, an even more potent class of synthetic opioids. Beijing also engaged China’s chemical industry to discourage the smuggling of fentanyl precursors; subsequent journalistic investigations showed that these actions may have impeded Mexican labs’ ability to source their chemicals.

Much more, however, is needed. Loopholes in Chinese law make it difficult to prosecute the sellers of nonscheduled chemicals, even when they knowingly sell their products for illegal purposes or to Mexican criminal groups. Some precursor chemicals still flow freely out of the country. And differences in the Chinese and U.S. anti-money-laundering regulations also hamper Beijing’s ability to prosecute Chinese money launderers that service Mexican cartels.

In 2024, only 0.2 percent of the fentanyl that entered the United States came in from Canada.

In 2024, thanks to efforts made by the resurrected joint U.S.-Chinese counternarcotics working group, for the first time in years, Chinese law enforcement actively collaborated with the United States to combat money laundering and found creative ways to indict Chinese nationals who collaborated with Mexican cartels. Any large and prolonged tariffs on China would damage all of this fragile and limited but real progress. (And Trump’s decision to pardon the Silk Road kingpin Ross Ulbricht further weakens the authority of any U.S. demands that other countries step up to dismantle online drug smuggling.)

Trump’s hard-line moves against Canada make even less sense than his shows of force against China and Mexico. According to U.S. Customs and Border Protection, in 2024, only 0.2 percent of the fentanyl that entered the United States came in from Canada—only 43 pounds were seized at the U.S.-Canadian border. Meanwhile, 882 pounds of fentanyl were seized while making their way over the U.S. border to Canada.

Yet Canada is, in fact, facing serious organized crime and money laundering challenges, as is the United States. The presence of Mexican cartels there is growing, not just in money laundering but also, possibly, in drug production. Chinese and Indian organized crime groups are deeply entrenched in Canada; as well as expanding their contraband smuggling and money-laundering operations, they are increasingly making themselves available to do foreign governments’ dirty work. But the United States is grappling with the same threats, and isolating Canada with punitive tariffs will only deepen the problem facing both nations. Intensified law enforcement cooperation in a friendly atmosphere would benefit the United States by enhancing its abilities to gather intelligence and shut down transnational criminal networks.

THE RIGHT ANTIDOTE

There are powerful tools that Washington can use to combat the production and exportation of fentanyl-related products beyond its borders and to dismantle dangerous transnational criminal groups. Implementing terrorist designations, military strikes, and sky-high tariffs are not in that arsenal. Rather than mounting extensive FTO-related prosecutions, hampering trade, or engaging in military actions in Mexico, Trump should carefully use the threat of their implementation to encourage Sheinbaum to resurrect meaningful law enforcement cooperation with Washington.

Mexico is already reacting to the threat: to delay tariffs, the Mexican government promised to deploy an additional 10,000 Mexican National Guard troops to the U.S. border to help stop the flow of migrants and drugs, on top of the 15,000 it sent there in 2019 in response to pressure from Washington. Secretary-level talks between U.S. and Mexican officials are underway to hammer out further deliverables from Mexico. Washington should insist that Mexico permit U.S. law enforcement agents vastly expanded access to the country and participate intensively in the execution of joint law enforcement projects, as it did during the Calderón administration.

The United States must play its part by committing to combating money laundering and weapons smuggling into Mexico. Acknowledging the need to reduce Mexico’s spiraling violence, the United States should help design new law enforcement strategies that focus on dismantling the middle operational layers of Mexican criminal groups—their main hit men, logisticians, bribe runners, and money launderers. Simply capturing or killing the cartels’ top bosses exacerbates violence and leads to the groups’ splintering and reconstituting themselves. This middle-level targeting should be combined with a more careful sequencing of law enforcement operations, coupled with advance deployment of law enforcement forces, to weaken the cartels’ influence in an expanding ring of contiguous territories. The United States must also help Mexico build its own investigative capacities and insulate its prosecutors and judges from corruption and threats. If Mexico is unwilling to unravel the disastrous 2024 change it made to its constitution mandating that all judges be elected, the United States should at least insist on and help Mexico establish effective protection for judicial officials.

Even before Washington threatened tariffs, Sheinbaum appeared far more prepared than her predecessor to work collaboratively with the United States. By asking for the right deliverables, the Trump administration can strongly reinforce this inclination. Canada has also promised to expand its law enforcement actions to avert tariffs. Among other measures, the country increased its budget to combat fentanyl, dedicated more personnel and assets to patrolling the U.S.-Canadian border, and launched a U.S.-Canadian Joint Strike Force to tackle fentanyl and money laundering—all useful actions that will help fight organized crime.

The drug crisis demands a more collaborative approach.

But Trump is fast losing any valuable leverage his threats had given him by refusing to accept his targeted countries’ offers to change. He has already said that Canada’s panoply of responses to his complaints are not enough to avert the reimposition of tariffs in March. Mexico’s promise to send another 10,000 troops to the U.S. border is apparently not enough, either. Despite both countries’ efforts to placate Trump and respond swiftly to reasonable requests, Trump did not exempt them from his harsh 25 percent tariff on steel and aluminum. If governments are punished no matter whether they comply with U.S. demands, why bother trying to fulfill them?

In 2024, China, too, showed that it is willing to do business with the United States on confronting the drug crisis. Washington should further engage with Beijing on how to close legal loopholes and ramp up the prosecution of drug and chemical smugglers, money launderers, and organized crime syndicates before ramping up tariffs. In the unlikely scenario that China manages to stop the export of most synthetic drug precursors and their sourcing relocates elsewhere (most likely to India), the United States could remove China from the official U.S. list of major drug producing and transshipment countries (known as the Majors’ List), something Beijing badly wants.

But asking China to reduce the outflow of drugs and precursor chemicals to nothing—a demand Washington has explicitly made—is useless, because it is technically impossible. The standard to which Washington should instead hold China should be that Chinese authorities respond in a swift and sustained way to U.S. investigations, consistently monitor their supply chains for leakage into the illegal trade, and proactively prosecute Chinese individuals and companies that do business with drug-trafficking groups.

If Beijing fails to deliver, Washington can always return to more punitive actions. Beyond retaining China on the Majors’ List, it could determine that China has been noncooperative in U.S. counternarcotics efforts, a finding that could trigger various economic sanctions and penalties. The United States could also increase its sanctions against and prosecutions of Chinese pharmaceutical companies, brokers of chemical products, and smuggling and money-laundering networks. Washington could even expand visa denials to Chinese government officials and business leaders.

The U.S. drug epidemic is a crisis with transnational dimensions, demanding strong teamwork between a variety of countries—an approach that has already shown its efficacy. The United States has learned the lesson that the right response to drug epidemics is not to launch a “war.” It would be a tragedy to have to learn this lesson again, this time with far more agonizing consequences.