Trump’s labelling of drug cartels as ‘terror groups’ puts US businesses at risk of prosecution, say experts

NEW YORK: United States President Donald Trump’s recent move to label Mexican cartels as foreign terror groups could put American businesses at risk of prosecution, analysts have warned.

The White House’s war on cartels began on Trump’s first day in office on Jan 20, when he announced he would be designating eight cartels as “foreign terrorist organisations”.

Those from Mexico, including the dominant Sinaloa Cartel and the powerful Jalisco New Generation Cartel, account for six of them.

Notoriously brutal and corrupted, these cartels have been widely blamed for the drug epidemic in America. 

Trump promised to “wage war” on them in an effort to curb the fentanyl crisis, which has led to tens of thousands of overdoses every year.

According to the US Drug Enforcement Administration, nearly 75,000 Americans died in 2023 from overdose of an opioid like fentanyl – much of it coming across its southern border.

Experts said the designation would allow counterterrorism measures to be employed in the fight against drugs, including covert ops, as well as allow US officials to go after cartel money.

“A foreign terrorist organisation designation, at its base level, opens up a number of different legal mechanisms to target material support or financing of these groups, which could conceivably be used to go after some of their financial networks,” noted Henry Ziemer, associate fellow at US-based think tank Center for Strategic and International Studies’ Americas Program.

WHY THE LABEL COMPLICATES THINGS

However, Ziemer pointed out that this means those who do business with the cartels, or have connections to individuals involved in such crime syndicates, could become targets too.

For instance, family members who send money from the US back to relatives in Mexico could be implicated if the money ends up in cartel activity, he said. 

“This is absolutely a concern. I would say the foreign terrorist organisation designation definitely makes the penalties for doing business with cartels, who are now (considered) terrorists, much harsher – or at least it can be,” he told CNA.

“And, it's important to note that criminal groups have deeply penetrated the Mexican economy.”

He said cartels have their hands in a large number of industries, from the production of lumber, limes and avocados, to the mining sector – which leaves US businesses exposed.

Michael Ballard, director of intelligence at security company Global Guardian, said American businesses with links in Mexico need to take a forensic look at exactly who they are dealing with.

“Reexamine some of your suppliers, your partners. Talk with some law firms, make sure you are in compliance with this, because funding a foreign terrorist organisation is not something that a business wants on their record,” he added.

DOUBLE TROUBLE

Trump’s war on drugs is at the centre of a brewing trade war between both countries.

The US president imposed 25 per cent tariffs on Mexico earlier this month but delayed some of these duties after blowback on financial markets. The pause will last until Apr 2, although reports said the situation remains fluid and the specifics of the upcoming tariffs could change.

The Mexican government has reportedly stepped up its policing of cartels as the date – what Trump has called “Liberation Day” – draws near. 

In a further sign that Mexico is working to appease Trump, it extradited 29 prominent cartel members to the US in early March.

They include notorious drug lord Rafael Caro Quintero, who has been wanted by the US for the murder of a Drug Enforcement Administration agent in 1985.

He was one of the founding members of the now-defunct Guadalajara Cartel, which trafficked cocaine and marijuana to the US in the 1980s.

However, the US could still impose stronger and more controversial measures. Trump has hinted at the possibility of sending troops into Mexico to take out the cartels, fuelling fears of a military conflict on America's southern borders.