The NY Times warns Trump that designating drug cartels as terrorist groups could hurt the economy

A report by two Mexico-based New York Times reporters warned that President Trump’s designation of Mexican drug cartels as foreign terrorist groups could “harm” the U.S. economy.

ua story published Wednesdayreporters Maria Abi-Habib and Simon Romero wrote that Trump’s recent executive order could force US companies to choose to stop doing business in Mexico rather than be subject to government sanctions.

That could result in “an outcome that could have a major impact on both countries given their deep economic interdependence,” the two wrote. The headline read: “How labeling cartels ‘terrorists’ could hurt the US economy.”

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Trump signed a slew of executive orders on his first day in office, including one that designated international cartels and organizations including MS-13 and the violent Tren de Aragua as Foreign terrorist organizations (FTO) and Specially Designated Global Terrorists (SDGT).

By placing the FTO designation on these groups, the US can take targeted actions against them, including financial penalties and even military action.

Despite the deadly threat of those cartels, the Times told readers that prosecuting them in the way Trump wants “could be immensely complicated” since many American companies manufacture in Mexico and have ties to some of the cartels.

“These criminal networks have expanded their operations far beyond drug trafficking and people smuggling,” the journalists said. “They are now embedded in a wide swath of the legal economy, from avocado farming to the country’s billion-dollar tourism industry, making it difficult to be absolutely certain that American companies are insulated from cartel activity.”

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The report quoted Samantha Sultoon, senior adviser on sanctions policy and threat financing, as saying that while U.S. leaders and lawmakers had wanted to treat cartels as terrorists in the past, they backed off after seeing “what the implications would be for trade, the economy and financial relations between Mexico and the United States.”

Sultoon, who advised both the previous Trump and Biden administrations, added: “Everyone came away thinking that such an appointment would actually be super short-sighted and reckless, even though previous administrations viewed the US-Mexico relationship far differently than the incoming Trump does. administration.”

Abi-Habib and Simon Romero went on to list the potential problems with Trump’s executive order, stating that it “could lead to serious penalties — including significant fines, asset forfeiture and criminal charges — to companies and individuals found to be paying ransom or extortion. “

“U.S. companies could also be ensnared by standard payments to Mexican companies that the cartel controls without the knowledge of the U.S. companies,” they added.

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Furthermore, reporters quoted US officials as saying it would be nearly impossible to find out which companies are hiring cartel members or are in any way associated with groups. Following the appointment of an FTO, US companies may choose to de-risk doing business with Mexican entities for fear of government fines.

Citing Swiss lawyer and terrorist financing expert Fabian Teichmann, the reporters mentioned that banks may “ultimately decide to avoid entire sectors that are considered high-risk” in the country.

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In addition, the FTO designation could hurt American companies north of the border that employ Mexican workers.

The report also said that money transfer companies suspending transactions with Mexico over concerns about cartel ties “could affect the remittances the country relies on.” It added that this “would be disastrous for the Mexican economy, which received $63.3 billion in remittances in 2023, which is almost 5 percent of the country’s gross domestic product.”