Background on the Situation
In the past week, amidst the 12-day war in the Middle East, various commentators speculated on what this conflict might imply for Mexico. Beyond the immediate impact, such as a potential rise in oil prices and increased recession risk, some welcomed the idea of a distracted United States in Iran and Israel turning its attention away from Mexico.
However, it’s clear that the US foreign policy can advance on multiple fronts simultaneously if desired. The United States remains the most powerful nation globally, and there’s no reason to believe that pressure on Mexico will decrease. In fact, with numerous open fronts—migration, trade, fentanyl—the bilateral relationship is unlikely to “cool”.
US Treasury Department’s Recent Actions
This week, the US Treasury Department issued sanctions against three Mexican financial institutions: CIBanco, Intercam, and Vector, which collectively manage over $22 billion in assets. The accusation is serious: money laundering for criminal organizations and facilitating fentanyl precursor chemical payments in China.
Donald Trump has been consistent in his threats. Combating Mexican cartels and curbing fentanyl trafficking are among his favorites. He has previously designated cartels as foreign terrorist organizations (FTO), a move experts warned would open the door to a financial offensive since cartels are profit-driven organizations.
Unilateral US Actions and Their Implications
Despite the narrative of “cooperation without subordination,” these actions are once again unilateral by the US government. Although I dislike rhetorical questions, one seems inevitable: Are we surprised? We shouldn’t be. Not only because the Trump administration has repeatedly demonstrated how to act without permission, but also because the signals were evident.
For instance, at this year’s National Banking Convention—Mexico’s primary financial system platform—Scott Rembrandt, Deputy Under Secretary for Strategic Policy at the US Treasury Department, met privately with Emilio Romano, Director of Bank of America Mexico and the new President of the Mexican Banking Association, to discuss money laundering. This meeting signaled that this issue is a priority.
Immediate Consequences for Mexico
Although the Mexican government insists “there are no proofs,” the accusation is on the table. The law allowing the Treasury Department to sanction foreign institutions relies on reasonable cause, not irrefutable evidence, putting Mexico at a disadvantage.
- Reputational Damage: The involved institutions and their connections, including individuals close to former President López Obrador, suffer reputational harm.
- Distrust in Mexican Banking System: The accusation sows distrust within the Mexican banking system and its ability to detect and halt illicit operations.
- Doubt in Mexican Investigative Efficacy: The most serious consequence is the doubt instilled about Mexico’s investigative capabilities.
President Sheinbaum’s Challenge
Once again, President Sheinbaum faces a complex scenario. The structural imbalance with the US limits her maneuvering space, but she could and should act. A fitting response would be to order independent investigations, not as a gesture towards Washington but as an act of sovereignty—something the officialism frequently boasts about.
