Contents

• Overview
• Political and Economic Situation
• U.S.-Mexican Relations and Issues for Congress
• Security Cooperation
• Congressional Action
• Collaboration on Migration
• Congressional Action
• U.S.-Mexico Trade and Economic Relations
• Bilateral Trade and Investment Flows
• U.S. Tariff Actions
• USMCA Joint Review Process and U.S.-Mexico Bilateral Negotiations
• U.S.-Mexico Economic Relations and Options for Congress

Summary

Mexico, the 10^th-most-populous country and 13^th-largest economy in the world, is bound to the United States by geography and deep economic, cultural, and historical ties. In addition to sharing a nearly 2,000-mile border, Mexico was the top U.S. trade partner in goods and services combined in 2025. Mexican-based drug cartels, eight of which the Trump Administration has designated as terrorist organizations, have endangered the lives of people, including U.S. citizens, in Mexico. U.S.-Mexico ties and issues, including addressing the production and trafficking of illicit synthetic drugs and the 2026 review of the U.S.-Mexico-Canada Agreement (USMCA), have prompted legislative and oversight activity in Congress.

Mexico's Domestic Situation

Mexico has undergone significant change under successive National Regeneration Movement (MORENA) presidencies. The party's founder, former President Andrés Manuel López Obrador (2018-2024), concentrated power in the presidency, raised wages and expanded social programs, and increased the role of the military in public security. President Claudia Sheinbaum, a former head of government of Mexico City (2018-2023) and a close ally of López Obrador, took office in October 2024 as Mexico's first female president. She has benefitted from MORENA and its allies' two-thirds majorities in both legislative chambers; mid-term elections scheduled for June 2027 could test the strength of her coalition. President Sheinbaum shepherded 22 constitutional reforms through congress during her first year, many proposed by López Obrador. Sheinbaum has adopted a more aggressive public security approach than her predecessor and partially aligned her trade policy with that of the United States by imposing tariffs on certain imports from countries with which Mexico does not have a free trade agreement, including the People's Republic of China.

U.S.-Mexico Relations

U.S. relations with Mexico have been tested as the Sheinbaum administration has sought to maintain Mexico's sovereignty while addressing U.S. concerns on various issues. Since February 2025, President Trump has used the imposition or threat of tariffs to spur the Mexican government into action on migration control, drug trafficking, and Rio Grande water deliveries to the United States. President Trump has repeatedly threatened unilateral U.S. military intervention in Mexico to combat drug cartels. The Trump Administration's July 2026 decision not to extend the USMCA in its current form and the continuation of U.S. tariff actions on imports from Mexico have resulted in economic uncertainty for some North American businesses and policymakers. The Trump Administration is continuing bilateral negotiations with Mexico on a range of trade and economic issues and has stated it may conclude an interim arrangement on some issues by the end of 2026.

Congressional Action

The 119^th Congress has considered legislation and conducted oversight on varied aspects of U.S. relations with Mexico. The FY2026 National Defense Authorization Act or NDAA (P.L. 119-60) required several reports, plans, and strategies to track Mexico's efforts against illicit synthetic drugs and to improve joint training and security cooperation. H.Rept. 119-698 accompanying the House-passed version of an FY2027 NDAA (H.R. 8800) would require a report on how the U.S. military is using unmanned aircraft systems (UAS) and counter-UAS systems against cartels and a report on how to combat hydrocarbons smuggling. The FY2026 National Security, Department of State, and Related Programs (NSRP) Appropriations Act (Division F, P.L. 119-75), withholds non-fentanyl-related foreign aid to Mexico until the Secretary of State certifies that Mexico is delivering water owed to the United States pursuant to a 1944 Water Treaty, and withholds 30% of counterdrug assistance to Mexico until the Secretary of State certifies Mexico's counterdrug efforts. The House-passed version of an FY2027 NSRP (H.R. 8595/H.Rept. 119-631) includes the same water-delivery-related conditions on non-fentanyl-related assistance to Mexico and would withhold 50% of counterdrug assistance until the Secretary of State certifies Mexico's antidrug efforts; it would also require reports related to Mexico's capacity to counter cartels and how Mexico plans to make up its water delivery deficit to the United States. The USMCA Implementation Act (P.L. 116-113) requires the Administration to consult with Congress before and after the review of USMCA. Congress may choose to evaluate whether potential revisions to USMCA require congressional approval and assess how U.S. tariffs have affected bilateral trade. Those assessments could inform potential measures to codify, terminate, or modify the tariffs and their underlying authorities.

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Overview

Mexico arguably affects the United States more directly than many other countries due to geographic proximity, economic interdependence, and shared security challenges.¹ Under President Claudia Sheinbaum's administration (October 2024-present), Mexico has experienced deepening one-party dominance, modest economic growth, and challenges in its relations with the United States. Supporters of the governing National Regeneration Movement (MORENA) assert that MORENA has empowered working people after decades of economic dominance by elites.² In contrast, some critics compare MORENA to the Institutional Revolutionary Party (PRI), which led authoritarian governments in Mexico from 1929 to 2000 with few checks and balances.³ This report provides an overview of Mexico's political and economic situation under the Sheinbaum administration, analyzes select bilateral issues of ongoing interest to the 119^th Congress, and provides options for future legislative action and oversight.

Political and Economic Situation

Mexican President Claudia Sheinbaum was inaugurated to a six-year term in October 2024. Sheinbaum, a climate scientist, is Mexico's first female president and a close ally of MORENA founder and former President Andrés Manuel López Obrador (2018-2024).⁴ Sheinbaum won 59% of the vote in a three-way race in June 2024 after pledging to build on her predecessor's legacy. In the concurrent legislative election, MORENA and its allies also secured the two-thirds majorities in the Chamber of Deputies and the Senate necessary to pass constitutional reforms. Seated on September 1, 2024, the new congress approved some constitutional reforms proposed by former President López Obrador, including a reform requiring the direct election of federal judges. The June 2025 judicial elections were characterized by low turnout (12%) and voter confusion with complicated ballots; they produced a MORENA-aligned supreme court and federal court judges who, on average, lack judicial experience compared to their predecessors. ⁵

According to an average of polls as of August 2026, President Sheinbaum has maintained approval ratings above 65%.⁶ She has continued aspects of López Obrador's legacy by holding daily morning press conferences, passing and implementing constitutional reforms he supported, and maintaining social welfare programs. The majority of the 22 constitutional reforms enacted during Sheinbaum's first year were proposed by López Obrador, but some reflected Sheinbaum's priorities, including reforms aimed at broadening the public security ministry's authorities, advancing gender equality, and addressing extortion.

Figure 1. Mexico at a Glance: Map and Fast Facts

Sources: Created by CRS using data from Mexico's National Institute of Statistics and Geography (INEGI), International Monetary Fund (IMF), and UN Economic Commission for Latin America and the Caribbean (CEPAL). Trade statistics are from Trade Data Monitor (TDM).

In 2026, the Mexican congress rejected a constitutional reform of the electoral system that would have ended proportional representation in congress but approved other constitutional reforms that prohibit consecutive reelection at all levels of government, reduce federal and state legislatures' budgets, and cut pensions for some former officials.⁷ Critics argued the proportional representation reform would have weakened pluralism.⁸ In May 2026, the congress enacted Sheinbaum-backed technical reforms to postpone the next federal judicial election to 2028, change how candidates are selected, and simplify electoral ballots.⁹

Although President Sheinbaum arguably has been less confrontational towards the media than López Obrador, her government has struggled to respond to violence against journalists, a long-standing human rights concern in Mexico. Although the government has continued to provide protection to journalists who have been threatened, seven journalists have been killed in 2026 to date. Impunity rates remain high for crimes against journalists.¹⁰ The Sheinbaum administration also proposed greater governmental control of Mexico's media landscape. After significant criticism from civil society and press freedom groups, the government softened proposed regulations for radio and TV broadcasts in August 2026. Instead of giving the government's Telecommunications Regulatory Commission the ability to fine media outlets whose content was deemed inaccurate or offensive, the revised provisions require media outlets to develop a system to handle citizen complaints about content.¹¹

The Sheinbaum administration has abandoned what some analysts have characterized as López Obrador's relatively passive approach to drug cartels and highlighted the success of her security strategy as a significant achievement of her first two years in office.¹² Mexico's public security strategy focuses on addressing the root causes of crime and violence, increasing intelligence gathering and investigations, consolidating the Mexican National Guard under the defense ministry, and strengthening federal interventions in high-crime states.¹³ From October 2024 to July 2026, according to the Mexican government, Mexican authorities detained some 63,564 individuals accused of serious crimes, recorded a 51% reduction in average daily homicides, and seized 518.7 tons of illicit drugs in Mexico.¹⁴ Critics assert that surging violence in some states, extortion, and ongoing disappearances—some allegedly perpetrated by crime groups colluding with state authorities—as well as corruption and impunity still need to be addressed.¹⁵ In April 2026, the Mexican government received U.S. extradition requests for the governor of Sinaloa and nine other MORENA officials whom the Department of Justice charged with helping the Sinaloa Cartel traffic drugs and weapons.¹⁶ The Sheinbaum administration has not extradited those officials to the United States, but President Sheinbaum has confirmed Mexico's attorney general has opened investigations into their alleged crimes.¹⁷

Mexico's economy grew 0.5% in 2025 and is forecast to grow 1.2% in 2026.¹⁸ Credit ratings agencies have raised concerns about the country's low economic growth, rising debt, and continued spending to support state-owned oil and electricity companies.¹⁹ Economic growth could be affected by U.S. tariff rate changes, changes in Mexico's tariffs on other countries, the outcome of the U.S.-Mexico-Canada Agreement (USMCA) joint review, and the effects of constitutional reforms on Mexico's investment climate. In January 2025, the Sheinbaum administration launched Plan México, an industrial policy plan aimed at attracting $277 billion in domestic and foreign direct investment (FDI). In May 2026, the government announced that Plan México would focus on reducing regulatory barriers, digitalizing processes, and coordinating investment in key sectors (energy, trains, roads, and ports).²⁰ Some economists have also urged the Plan to focus on providing legal certainty, improved highway security, better infrastructure, and more predictable labor and other costs for U.S. and other investors.²¹ According to the State Department, some U.S. investors have raised concerns about Mexico's 2025 energy reforms that favor state agencies over private investors and the effects of elected judges aligned with political parties on judicial impartiality.²²

Since President Sheinbaum took office, foreign policy has become a challenge facing her government. The second Trump Administration has adopted a policy of asserting U.S. preeminence in the Western Hemisphere. The Administration has used economic leverage and threats of military intervention to apply pressure on Mexico on a range of issues (as discussed below).²³

Mexico remains dependent on importing inputs from Asian countries and exporting final goods to the United States.²⁴ President Sheinbaum is seeking to reduce Mexico's dependence on the United States by building Mexico's domestic industrial base and seeking to diversify the country's trade partners. Compared to her predecessor, Sheinbaum has more actively engaged with varied foreign partners and participated in global fora like the Group of Seven and the Group of 20.²⁵ Sheinbaum and her government have pursued closer economic relations with Canada, rebuilt relations with some Latin American countries, concluded an updated free trade agreement with the European Union, and held high-level talks with the People's Republic of China (PRC or China).²⁶ Former Mexican diplomats have urged her to expand these ties and relations with Latin America.²⁷ Sheinbaum has pledged to attend the Asia Pacific Economic Cooperation (APEC) leaders' summit scheduled to be held in Beijing in November 2026, during which she could have a bilateral meeting with PRC President Xi Jinping.²⁸

At the same time, the Sheinbaum administration has maintained some of Mexico's independent foreign policy positions and "Estrada Doctrine" principles revived under López Obrador favoring nonintervention in other countries' internal affairs and national self-determination.²⁹ Until January 2026, Mexico continued oil shipments to Cuba that had started under López Obrador to help alleviate fuel shortages on the island. ³⁰ Mexico has continued to send humanitarian aid to Cuba. Like the preceding government, the Sheinbaum administration reportedly has not moved to expel Russian diplomats whom U.S. officials identified in 2022 as spies conducting covert operations.³¹ On Venezuela, the Sheinbaum government opposed the U.S. capture of Venezuela's leader Nicolás Maduro, including in sessions of the UN Security Council and the Organization of American States.³² In April 2026, Sheinbaum traveled to Spain to participate in a summit of progressive leaders, some of whom had criticized President Trump.³³ Sheinbaum reportedly has avoided commenting directly on the Nicaraguan government's July 2026 statement that it would no longer convene elections.³⁴

U.S.-Mexican Relations and Issues for Congress

U.S.-Mexican relations have been volatile during the second Trump Administration as U.S. officials have used tariff threats and other measures to pressure Mexico to take certain actions and tied the future of USMCA to demands related to security and other topics. Presidents Trump and Sheinbaum have spoken several times by phone and met twice in person, most recently at the FIFA World Cup final on July 19, 2026. President Sheinbaum initially sought to privately negotiate with the Trump Administration rather than publicly challenge U.S. policies, except for U.S. statements threatening unilateral military actions in Mexico. In December 2025, for example, President Trump reportedly threatened to impose a 5% tariff on Mexico for not meeting its water deliveries to the United States in the Rio Grande Valley agreed upon in a 1944 Water Treaty.³⁵ After high-level talks, Mexico agreed to provide a specified level of water per year.³⁶ Other examples of cooperation between the U.S. and Mexican governments include a February 2026 action plan on critical minerals and a June announcement of new U.S. funding to support efforts in Mexico to control an outbreak of New World screwworm (a parasitic disease affecting cattle and other livestock).³⁷

At times, President Sheinbaum has criticized some U.S. policies publicly. In July 2026, for example, she spoke out against U.S. immigration enforcement policies that have coincided with the deaths of Mexican nationals.³⁸ Sheinbaum has also expressed concern about the U.S. revocation of visas of some Mexican politicians and their family members, including the visa of López Obrador's son.³⁹

Security Cooperation

In 2025, the Trump Administration declared a national emergency on the U.S. southern border related to drug trafficking (and unauthorized migration) and imposed tariffs on certain Mexican imports, in part in an effort to compel the Mexican government to address those issues.⁴⁰ In February 2026, a U.S. Supreme Court decision invalidated those tariffs (see "U.S. Tariff Actions" below).⁴¹ In February 2025 and July 2026, the State Department designated a total of eight Mexican drug cartels as foreign terrorist organizations (FTOs).⁴² As of August 2026, the State Department had revoked the visas of at least 93 family members and other associates of sanctioned drug traffickers tied to FTO-designated cartels.⁴³ As of October 2025, the Trump Administration had also reportedly revoked the visas of 50 Mexican politicians, some for alleged drug crimes or corruption (that figure has not been updated publicly).⁴⁴

In April 2026, the U.S. Department of Justice (DOJ) indicted the then-governor of Sinaloa and nine other officials for their role in drug trafficking with the Sinaloa FTO.⁴⁵ In June, the U.S. Department of the Treasury (Treasury) issued a statement asserting that it would impose sanctions on politicians complicit in cartel activity.⁴⁶ President Sheinbaum has criticized U.S. visa revocations, sanctions, and indictments of politicians as meddling in Mexico's affairs, but also urged any corrupt politicians in MORENA to resign.⁴⁷

The Trump Administration has also expanded the U.S. military presence at the southern border, issued a National Security Strategy and a National Defense Strategy (NDS) that prioritize homeland defense, and published a Counterterrorism Strategy focused, in part, on "narcoterrorists and transnational gangs."⁴⁸ The NDS asserts that the U.S. military is ready to "take focused, decisive action" to advance U.S. goals, as it did in the January 2026 operation to capture Maduro in Venezuela.⁴⁹ In March 2026, defense and security ministers from the United States and 16 Latin American and Caribbean countries launched the "Americas Counter Cartel Coalition" (A3C) and signed a joint security declaration stating their intent to expand multilateral and bilateral cooperation in several areas.⁵⁰ Four of the now 19 coalition members (including Colombia) have apparently agreed to carry out joint military operations with the U.S. military against drug traffickers.⁵¹ Mexico, the primary source country for U.S.-bound synthetic drugs—including fentanyl—is not a member of the coalition.⁵²

President Sheinbaum has worked with the United States on security and counternarcotics issues but has opposed unilateral U.S. military actions and overt U.S. involvement in operations in Mexican territory. In February 2025, Sheinbaum deployed thousands of additional Mexican National Guard troops to the country's borders, and as of January 2026, her government had transferred a total of 92 drug traffickers into U.S. custody.⁵³ Public security minister Omar García Harfuch has increased intelligence-sharing and operations with U.S. agencies and asserted in August 2026 that Mexico had arrested 85 politicians, from all major parties, for a range of crimes.⁵⁴ Mexico has provided financial intelligence that Treasury has used to impose sanctions on people and entities engaged in money laundering, drug trafficking, and fuel theft.⁵⁵ Mexican security forces have deepened cooperation with U.S. counterparts in Mexico, despite restrictions on operations and intelligence-sharing enacted by the Mexican congress in 2020. Bilateral efforts led to the January 2026 arrest of a major Canadian drug kingpin in Mexico and the Mexican military's February 2026 killing of Nemesio Rubén Oseguera Cervantes ("El Mencho"), head of Cartel Jalisco Nueva Generación (CJNG).⁵⁶

In September 2025, during Secretary of State Marco Rubio's visit to Mexico, the U.S. and Mexican governments issued a joint statement announcing a new security implementation group.⁵⁷ The joint statement listed a broad variety of aims, including combating arms trafficking (a top Mexican priority) and reaffirmed principles such as "respect for sovereignty" and "shared and differentiated responsibility" that the Mexican government has espoused. The statement did not specify methods for assessing progress toward stated aims.

On June 12, 2026, officials convened the fourth meeting of the security implementation group and reaffirmed that security cooperation would continue with "full respect for each country's sovereignty."⁵⁸ This language may have been included in response to the accidental deaths of two U.S. Central Intelligence Agency (CIA) officers in Chihuahua who reportedly may have been working with state officials without federal approval.⁵⁹ Reports also emerged in May 2026 suggesting the CIA had facilitated a lethal operation against a cartel leader in the state of Mexico in March 2026; the Mexican government and the CIA denied those assertions.⁶⁰ Some analysts assess the Sheinbaum government may accept U.S. involvement in operations in Mexico as long as it remains as limited and covert as possible.⁶¹ Others assess that Sheinbaum may accept overt and unilateral U.S. military operations despite the political costs to her popularity and Mexican sovereignty if doing so could preserve Mexico's preferential access to the U.S. market under USMCA.⁶²

Congressional Action

Congress has appropriated most security assistance to Mexico through the State Department's International Narcotics Control and Law Enforcement (INCLE) funding account. INCLE assistance for Mexico averaged $100 million annually from FY2015 through FY2021 before falling to $64 million in FY2022 and $48 million in FY2023 and FY2024.⁶³ Amid reductions in global foreign assistance, the second Trump Administration has continued INCLE support to Mexico and requested $90 million in such assistance in its FY2027 budget request.⁶⁴ The Administration has not publicly released information on the amount of INCLE assistance the State Department has allocated for Mexico from FY2024 onward. Military training funded by the State Department and Department of Defense (DOD)⁶⁵ has also continued, but Economic Support Fund assistance for human rights and rule-of-law programs ended following the Trump Administration's termination of many foreign aid programs in 2025.⁶⁶

The FY2026 National Defense Authorization Act (NDAA; P.L. 119-60) required a report on joint training with Mexico to combat transnational criminal organizations (TCOs; §1274), a plan to improve bilateral counterdrug cooperation (§6717), a report on addressing fentanyl trafficking from countries such as Mexico (§8313), annual reports on efforts to prevent methamphetamine smuggling from Mexico (§8318), and a strategy for countering TCOs in Mexico (§8365). The National Security, Department of State, and Related Programs (NSRP) Appropriations Act, Division F of the FY2026 Consolidated Appropriations Act (P.L. 119-75), withheld the provision of non-fentanyl-related U.S. foreign assistance to Mexico until the Secretary of State certifies that Mexico is delivering water owed to the United States pursuant to the 1944 Water Treaty (§7045(H)). The legislation also withheld 30% of the unspecified INCLE funds made available to Mexico until the Secretary of State certifies that the Mexican government has met certain antidrug-related and law-enforcement-related conditions.

H.Rept. 119-698, accompanying the FY2027 House-passed version of an NDAA (H.R. 8800), would require a report on how the U.S. military is using unmanned aircraft systems (UAS) and counter-UAS systems against TCOs operating near the U.S.-Mexico border. It would also require a report on how to combat hydrocarbons smuggling. S.Rept. 119-127, accompanying the Senate Armed Services Committee's version of an FY2027 NDAA (S. 4784), would encourage greater DOD intelligence-sharing and capacity-building with vetted Mexican security forces.

An FY2027 NSRP appropriations bill passed by the House in July (H.R. 8595) would make $1.8 billion in National Security Investment Programs (NSIP) and INCLE funds available to counter fentanyl and other synthetic drugs, including through law enforcement cooperation and capacity building in Mexico and other countries. The act would withhold the provision of non-fentanyl-related foreign assistance for Mexico until the Secretary of State certifies that Mexico is making up its water delivery debt to the United States; it would also withhold 50% of the unspecified INCLE funds made available to Mexico until the Secretary of State certifies Mexico is meeting several conditions in its counterdrug efforts.⁶⁷ H.Rept. 119-631 accompanying the act would require reports on the readiness of Mexico's law enforcement and judiciary to carry out operations against cartels and on the status of Mexico's water deliveries. The Senate Appropriations Committee has yet to mark up an FY2027 NSRP bill.

In addition to the legislation that has been enacted and considered, Congress could consider whether to specify a level of INCLE or NSIP assistance for Mexico in future NSRP measures and whether to require the Administration to publicly release information on how INCLE and other funding from the State Department has been allocated from FY2024 onward. Congress could also consider whether to direct how funds are to be used and whether to withhold assistance until certain conditions are met. In addition, Congress could pass a resolution to authorize or prohibit strikes or other U.S. military operations at the border, at sea, or inside Mexico. Congress could hold hearings, conduct delegations, or engage in official correspondence with both U.S. and Mexican officials to assess current cooperation.

Collaboration on Migration

Trump Administration actions to counter unauthorized migration into the United States have affected Mexicans in the United States and migrants seeking to enter the United States from third countries through Mexico. The Trump Administration reportedly has included renewed U.S. demands for Mexico to increase its efforts against unauthorized migration as part of bilateral talks related to USMCA (see below).⁶⁸ The Sheinbaum administration has expanded migration enforcement operations and continued to limit the number of humanitarian visas granted to migrants encountered in Mexico. While the Mexican government has also continued to receive non-Mexican migrants removed or transferred from the United States, Mexico's Foreign Ministry has condemned reported U.S. removals of some 2,300 Mexicans to Guatemala and Honduras.⁶⁹

On January 20, 2025, President Trump suspended the entry of unauthorized migrants at the southwest border, including nearly all asylum seekers;⁷⁰ that suspension of asylum has been subject to legal challenge. President Trump also ended use of the CBP One application, a U.S. Customs and Border Protection tool the Biden Administration created to manage appointments for asylum seekers at ports of entry, thereby canceling the appointments of thousands of migrants waiting in Mexico.⁷¹ The Department of Homeland Security (DHS) has sought to increase removals of Mexican nationals and non-Mexican nationals to Mexico. The U.S. military has expanded its footprint at the border, including in national defense areas (established in 2025) where migrants detained in those areas can be charged with criminal trespassing.⁷² These policies have contributed to a reported 93.5% reduction in migrant encounters at the U.S. southwest border from January through July 2026 compared with the same period in 2024.⁷³

President Sheinbaum has expanded consular and legal services for Mexicans in the United States, condemned the deaths of Mexican nationals in U.S. detention centers and during immigration enforcement actions, and provided reception and integration services for Mexican nationals returned or removed from the United States.⁷⁴ On August 14, 2026, during Sheinbaum's daily press conference, the head of Mexico's National Migration Institute (INM) asserted that Mexico had "received" nearly 271,193 Mexican nationals deported or returned to Mexico—171,508 by land and 99,685 by air—between January 20, 2025, and August 13, 2026.⁷⁵ Mexican returnees are eligible to receive shelter and transport to their families, identity documents, and access to social programs, among other services. The INM official also noted that Mexico had received some 19,000 non-Mexicans but did not comment on any services or protection offered to those individuals or on reported challenges facing migrants in southern Mexico, many of whom lack identity documents, shelter, and access to social services.⁷⁶ Some analysts maintain that the DHS decision to send repatriation flights to southern Mexico and U.S. foreign assistance cuts have complicated humanitarian efforts to assist deportees.⁷⁷

Since the end of CBP One, some 70% of asylum seekers in Mexico have said they intend to stay in the country.⁷⁸ As of December 31, 2025, Mexico was hosting 152,000 refugees; the top countries of origin of those refugees were Honduras, Venezuela, El Salvador, Cuba, and Haiti.⁷⁹ As of that time, an estimated 173,532 asylum-seekers were also present in Mexico, with most originating in Haiti and Cuba. Mexico's Commission for Refugee Assistance (COMAR) has struggled to process applications, and humanitarian agencies have struggled to meet migrants' basic needs amid assistance cuts by the United States and other donors.⁸⁰

Congressional Action

Congress may seek to influence U.S.-Mexico migration cooperation through legislation, including appropriations, and oversight. P.L. 119-21 (H.R. 1), the budget reconciliation law enacted in July 2025 and commonly known as the One Big Beautiful Bill Act, included a significant increase in funds for immigration enforcement. Congress may seek to influence U.S. migration policy in the Western Hemisphere through its consideration of the Trump Administration's FY2027 budget proposal. The Administration requested $4 billion through the International Humanitarian Assistance (IHA) account to, among other activities, provide humanitarian assistance to refugees and migrants abroad, fund voluntary returns, and build other countries' migration management capacities. Congress could consider whether to direct IHA funds for programs in Mexico and whether to restrict or place conditions on the types of activities that may be funded. Congress could consider legislation to create a statutory third-country removal program for immigrants with final removal orders, require increased reporting to Congress regarding third-country agreements, and/or enact additional procedural requirements to govern how transfer decisions are made, carried out, and contested. Congress could also consider expanding, restricting, or placing conditions or reporting requirements on any U.S. migration control assistance to Mexico and assessing the effects of reductions of humanitarian assistance on migrants in Mexico.

U.S.-Mexico Trade and Economic Relations

U.S. trade with Mexico and bilateral FDI have expanded significantly since the entry into force of the 1994 North American Free Trade Agreement (NAFTA), which was replaced by USMCA in July 2020. USMCA provides that the majority of trade between the United States, Canada, and Mexico is duty-free, as NAFTA provided, and updates certain provisions that are central to U.S.-Mexico trade, such as auto rules of origin and investment, from those set forth in NAFTA. The three countries conducted the first joint review of USMCA in July 2026, as specified by the agreement's text.⁸¹ At the joint review, the United States declined to renew USMCA in its current form.⁸² The second Trump Administration has also imposed unilateral tariffs on imports from Mexico under multiple statutory authorities (see "U.S. Tariff Actions" below), reducing Mexico's duty-free and preferential access to the U.S. market negotiated under NAFTA and USMCA. In 2026, the United States and Mexico have undertaken bilateral discussions related to the joint review of USMCA, U.S. tariffs, and other bilateral issues (see "USMCA Joint Review Process and U.S.-Mexico Bilateral Negotiations" below).

Bilateral Trade and Investment Flows

When considering trade in goods and services together, Mexico is the United States' top overall trading partner.⁸³ Mexico was both the top destination for U.S. exports of goods and the top supplier of U.S. imports of goods in 2025, making it the United States' largest single trading partner in goods. Total bilateral trade in goods (imports plus exports) amounted to $870 billion.⁸⁴ Following Mexico, other top U.S. goods trading partners were Canada ($716 billion) and China ($408 billion). U.S. goods exports to Mexico were $337 billion, and U.S. imports from Mexico were $533 billion, resulting in a $196 billion goods trade deficit with Mexico in 2025. Top U.S. goods imports from Mexico were autos and auto parts, machinery and appliances, and electronics and parts.⁸⁵ Top U.S. goods exports to Mexico were electronics and parts, machinery and appliances, oil, and autos and auto parts.⁸⁶ Much of U.S.-Mexico goods trade occurs in the context of production sharing, resulting in high two-way trade in some industries, such as the automotive industry.⁸⁷

Total services trade (imports plus exports) between Mexico and the United States was $96 billion in 2025, making Mexico the sixth-largest U.S. services trading partner after Canada, Ireland, Switzerland, Japan, and Germany.⁸⁸ U.S. services exports to Mexico were $52.4 billion in 2025, while imports were $44.0 billion, resulting in an $8.4 billion trade surplus in services with Mexico in 2025. Services trade largely consisted of travel, transportation, business, and financial services.⁸⁹

In addition to trade in goods and services, bilateral FDI increased rapidly after the implementation of NAFTA. According to Mexican government data, the United States was the largest source of FDI flows to Mexico in 2024, accounting for approximately 40% ($16.5 billion) of the total ($36.9 billion).⁹⁰ Mexico's stock of FDI in the United States increased from $2.0 billion in 1994 to $48.8 billion in 2025, making the stock of Mexican FDI the 23^rd-largest in the United States and the largest stock from a developing economy in 2025.⁹¹

U.S. Tariff Actions

The second Trump Administration has invoked multiple statutory authorities to increase tariffs on U.S. imports from numerous countries, including Mexico. As of August 2026, certain U.S. imports from Mexico are subject to tariffs of varying rates under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) and a 10% tariff under Section 301 of the Trade Act of 1974 (19 U.S.C. §§2411-2420).⁹² Products that claim and qualify for duty-free status under USMCA receive an exemption from the 10% tariff under Section 301, while some USMCA-compliant products receive full or partial exemptions from the tariffs under Section 232.⁹³ In June 2026, 87% of U.S. imports from Mexico entered the United States under USMCA, up from 46% in January 2025 prior to U.S. tariff actions under the second Trump Administration, highlighting the role of the agreement in the continuation of duty-free trade for some U.S. imports that would otherwise be subject to tariffs.⁹⁴ The Administration may impose additional tariffs on imports from Mexico following the completion of an ongoing Section 301 investigation and ongoing investigations under Section 232. U.S. tariff actions, particularly those under Section 232, are issues under discussion in bilateral negotiations between the United States and Mexico related to the review of USMCA (see "USMCA Joint Review Process and U.S.-Mexico Bilateral Negotiations" below).

Section 232 of the Trade Expansion Act of 1962

Section 232 allows the President to impose tariffs on imports if an investigation determines that those imports "threaten to impair" national security.⁹⁵ U.S. steel, aluminum, and copper imports from all sources, including Mexico, are subject to a 25%-50% tariff; there is a limited exemption for certain USMCA-compliant products containing steel.⁹⁶ Section 232 tariffs also cover imports from Mexico of autos and auto parts (25%) and trucks (25%), buses (10%), and related parts (25%), but USMCA-compliant parts receive a full exemption, and vehicles receive a partial exemption.⁹⁷ In addition, there are ongoing investigations under Section 232 on other sectors that may result in tariffs or other import restrictions on Mexican products.⁹⁸

The International Emergency Economic Powers Act of 1977 and Section 122 of the Trade Act of 1974

From March 2025 until February 2026, imports from Mexico were subject to 25% tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA; 50 U.S.C. §§1701 et seq.) with exemptions for USMCA-compliant products. IEEPA authorizes the President to take certain actions with respect to imports in response to national emergencies but does not explicitly authorize tariffs. In February 2026, a Supreme Court decision held that IEEPA cannot be used to impose tariffs, and the President withdrew the tariffs.⁹⁹ Subsequently, the Administration indicated it would increase its use of other authorities.¹⁰⁰ From February 24, 2026, through July 24, 2026, U.S. imports from Mexico were subject to a 10% tariff imposed under Section 122 of the Trade Act of 1974 (19 U.S.C. §2132) with exemptions for USMCA-compliant products. Section 122 authorizes the President to impose tariffs to deal with balance-of-payments deficits, to prevent an imminent and serious depreciation of the dollar, or to cooperate with other countries to correct international balance-of-payments disequilibria.¹⁰¹ The Section 122 tariff was challenged in litigation, and in May 2026, the U.S. Court of International Trade (CIT) ruled that the statutory criteria for imposing tariffs under Section 122 were not met. Section 122 limits tariffs to a maximum rate of 15% and a period of 150 days, unless the period is extended by an act of Congress. The 150-day period ended in July 2026, and the Section 122 tariff expired amid the government's ongoing appeal of the CIT decision to the U.S. Court of Appeals for the Federal Circuit.

Section 301 of the Trade Act of 1974

Section 301 grants the Office of the U.S. Trade Representative (USTR) the authority to investigate certain foreign trade practices and take action (e.g., impose a tariff) if the investigation determines that a foreign trade practices is "unjustifiable" or "unreasonable or discriminatory" and "burdens or restricts United States commerce."¹⁰² In March 2026, following the February 2026 Supreme Court decision invalidating the tariffs imposed under IEEPA, the Administration initiated two investigations under Section 301 into the practices of dozens of economies related to excess industrial capacity and the imposition and enforcement of prohibitions of imports of goods made with forced labor.¹⁰³ Mexico was named in both investigations.

The forced labor investigation, which covered 60 economies, concluded in June 2026.¹⁰⁴ USTR found that Mexico was one of six economies that had failed to effectively enforce prohibitions on the importation of forced labor; USTR imposed a 10% tariff on those six economies, and a higher rate on the other economies, effective July 24, 2026.¹⁰⁵ As part of its commitments under USMCA, Mexico adopted measures to prohibit imports made with forced labor.¹⁰⁶ The tariffs under the forced labor investigation are being challenged in litigation. The Section 301 investigation into excess industrial capacity is ongoing and could result in additional tariffs on imports from Mexico. The Mexican government rejects the assertions made by USTR in both investigations.¹⁰⁷

USMCA Joint Review Process and U.S.-Mexico Bilateral Negotiations

USMCA Article 34.7 states that the three member countries are to meet on the sixth anniversary of USMCA's entry into force (July 1, 2026) to review the agreement and determine whether to continue the USMCA.¹⁰⁸ If a party does not agree to extend USMCA, the agreement requires the parties to conduct additional annual joint reviews until all parties agree to extend the agreement for another 16-year period (after which the parties will return to a six-year joint review cycle) or until USMCA terminates 16 years after its entry into force.¹⁰⁹ At the July 1, 2026, joint review, the United States declined to renew USMCA in its current form, while Mexico and Canada announced their desire to renew the agreement.¹¹⁰ USMCA remains in effect through 2036 and is now subject to annual reviews until it is renewed or expires.

The USMCA Implementation Act (P.L. 116-113) requires the President to consult with the House Ways and Means Committee and Senate Finance Committee, in addition to other stakeholders, before each joint review with respect to "any recommendation for action to be proposed" at the joint review, and "the decision whether or not to confirm that the United States wishes to extend" USMCA.¹¹¹ The USMCA also requires USTR to engage with these congressional committees following a joint review, including keeping the relevant committees informed of any developments.¹¹² In December 2025, USTR Jamieson Greer reported to the House Ways and Means Committee and Senate Finance Committee on the Administration's assessment of the operation of USMCA and its recommendations for action, stating that "a rubberstamp of the Agreement is not in the national interest" and that the outcome of the joint review "will depend on the successful resolution" of numerous bilateral and trilateral issues.¹¹³ USTR Greer's statement identified a non-exhaustive list of trilateral and bilateral trade and economic issues, some of which have been discussed in bilateral negotiations between the United States and Mexico related to the joint review. The Trump Administration has also reportedly tied political and security issues in Mexico to the trade and economic issues discussed under the USMCA joint review (see "Security Cooperation" above).¹¹⁴

One bilateral and trilateral issue is increased alignment on trade and economic policies. USTR has noted that some Mexican policies incentivize the use of third-party inputs from non-market economies¹¹⁵ and has sought coordinated or "complementary" trade actions from Mexico "reducing dependence on imports from outside the region," among other objectives.¹¹⁶ Some U.S. policymakers have asserted that Mexico serves as a platform for transshipment into the United States for goods from China.¹¹⁷ Mexican Economy Secretary Marcelo Ebrard has reportedly stated that transshipment accounts for less than 1% of Mexico's total trade.¹¹⁸ In January 2026, in response to U.S. concerns over transshipment and the use of third-party inputs in North American supply chains, the Sheinbaum government imposed a 50% tariff on over 1,000 products imported from countries with which Mexico does not have a free trade agreement, including India and the People's Republic of China.¹¹⁹ The United States has also sought coordination on screening of FDI that originates outside the United States and the development of a framework in Mexico similar to the Committee on Foreign Investment in the United States (CFIUS). In August 2026, President Sheinbaum submitted a bill to the Mexican Congress that would amend Mexican law to establish a comprehensive formal investment screening program for certain types of foreign investment.¹²⁰ According to Mexican government data, after the United States, other top sources of FDI included Japan ($4.3 billion), Germany ($3.8 billion), Canada ($3.2 billion), and the Netherlands ($1.8 billion). China was the 10^th-largest source of FDI inflows, accounting for about $710 million in 2024.¹²¹

U.S.-Mexico Bilateral Negotiations

The United States and Mexico held three rounds of bilateral negotiations related to the USMCA joint review from May through July 2026 following a series of technical discussions that took place in spring 2026.¹²² The bilateral negotiations focused on a number of topics, including economic security, steel and aluminum and derivative products, agriculture, and autos.¹²³ The technical discussions focused on North American supply chains, including limiting inputs from non-market economies, modifying rules of origin in certain industrial sectors, and cooperation on economic security.¹²⁴ A fourth round of bilateral negotiations is scheduled for September 2026.

In remarks in April 2026, USTR Greer stated that the United States had worked closely with Mexico over the past year and the Mexicans had "resolved a lot of issues."¹²⁵ In a Senate Finance Committee hearing on trade policy in July 2026, USTR Greer indicated that USTR may have "options for … interim arrangements" by the end of 2026.¹²⁶ A U.S.-Mexico agreement could resemble recent agreements on reciprocal trade (ARTs) negotiated by the Trump Administration and include commitments from Mexico to further align its trade and economic policies with the United States in return for modifications to U.S. tariffs under Sections 232 and 301 imposed on imports from Mexico.¹²⁷ USTR has not announced plans for trilateral negotiations related to the USMCA joint review or the official start of bilateral negotiations between the United States and Canada. In August 2026, trade tensions between the United States and Canada increased as the United States imposed 50% tariffs on certain imports from Canada, and Canada imposed counter tariffs.¹²⁸

U.S.-Mexico Economic Relations and Options for Congress

Mexico's proximity to the United States and the extensive bilateral trade and investment relationship under USMCA make it a focus of congressional attention. Members may consider whether and how to engage in consultations with the Administration on the USMCA joint review process, and with what priorities or objectives. Members may also consider whether revisions to USMCA or a bilateral agreement negotiated between the United States and Mexico related to the joint review should require congressional approval.¹²⁹ Members may also continue to pursue legislation directing the Administration to address issues related to U.S-Mexico trade and USMCA. In the 119^th Congress, some Members have introduced legislation related to the enforcement of Mexico's obligations under USMCA related to energy (H.R. 5926), the formation of a working group on travel and tourism under USMCA (H.R. 7454/S. 3787), and prioritizing the alignment of foreign investment review in North America under the USMCA joint review (S. 2861), among other issues.

Congress may also assess the role of U.S. tariff actions in the context of North American trade, including their impact on bilateral trade and the future of USMCA. In 2025, some Members introduced H.Con.Res. 25, which would express the sense of Congress that certain tariff actions on Canada and Mexico were in violation of USMCA. Other Members have supported the Administration's use of certain tariffs and could consider pursuing legislation that codifies certain tariffs.¹³⁰ Congress may also consider amending the authorities used by the Administration to impose tariffs to limit or expand the executive branch's ability to impose tariffs.

Footnotes

1.	For information on Mexican politics, see Emily Edmonds-Poli and David A. Shirk, Contemporary Mexican Politics, 5th ed. (Bloomsbury, 2026). For a history of U.S.-Mexican relations, see Jorge I. Dominguez and Rafael Fernández de Castro, The United States and Mexico: Between Partnership and Conflict (Routledge, 2013).
2.	Humberto Beck, "López Obrador's Transformation of Mexican Democracy," Current History, February 2025.
3.	Aldo F. Ponce, "The Weakening of the Mexican Party System: The Rise of AMLO's MORENA," in Political Parties and the Crisis of Democracy: Organization, Resilience, and Reform, eds. Thomas Poguntke and Wilhelm Hofmeister (Oxford University Press, 2024).
4.	Stephanie Taladrid, "The Mexican President Who's Facing Off with Trump," New Yorker, April 21, 2025.
5.	Amanda Driscoll et al., Mexico's Judicial Elections and the Politics of Reform, Judicature International, 2025.
6.	Chase Harrison, "Approval Tracker: Mexico's President Claudia Sheinbaum," Americas Society/Council of the Americas, September 3, 2026.
7.	Mexico News Daily, "Sheinbaum's Hard-Fought Electoral Reform Clears Its Final Hurdle," April 10, 2026.
8.	According to Mexico's National Electoral Institute (INE), 200 of the 500 seats in the Chamber of Deputies and 32 of the 128 seats in the Senate are selected through proportional representation; see INE, "The Mexican Electoral System," April 22, 2017, https://ine.mx/the-mexican-electoral-system/. Alexandra Helfgott, "What Are Sheinbaum's Electoral Reforms? 'Plan D' Electoral Reforms Explained," Moments in Mexico, August 6, 2025.
9.	Alicia Galván López, Mexico's Judicial Reform 2.0: Democratic Accountability or Institutional Centralization?, Texas Public Policy Foundation, June 17, 2026.
10.	Reporters Without Borders, "Mexico: Seventh Journalist Murdered in 2026 as Killing of Francisco Alejandro Leyva Exposes Glaring Failures in State Protection," July 22, 2026; Committee to Protect Journalists (CPJ), "Amid Spike in Journalist Killings in Mexico, CPJ Urges Federalizing Cases to End Impunity," August 10, 2026. CPJ tracks the percentage of journalists' murders that go unpunished.
11.	Elena San José, "The Government Relaxes the Rule on the Right of Hearings in the Face of Censorship Criticism," El País, August 26, 2026.
12.	Craig A. Deare, "Irregular Warfare in the Western Hemisphere Under Trump II," Small Wars & Insurgencies, vol. 37, January 21, 2026; Gobierno de México, Segundo Informe de Gobierno, September 1, 2026, https://www.presidenta.gob.mx/boletines/segundo-informe-de-gobierno.
13.	Gobierno de México, Secretariado Ejecutivo del Sistema Nacional de Seguridad Pública, Estrategia Nacional de Seguridad Pública 2024-2030.
14.	Gobierno de México, "Reporte de la Incidencia Delictiva: Agosto 2026," August 11, 2026.
15.	Will Freeman, "The Hole in Mexico's Security Strategy," Foreign Affairs, June 9, 2025; International Crisis Group, Sinaloa's War of the Splinters: Fighting Crime in Mexico Under U.S. Threat, July 7, 2026; Viviana Ríos, "The Real Reasons Mexico Cannot Defeat the Cartels," Mexico Decoded, September 8, 2026.
16.	U.S. Department of Justice (DOJ), "Governor of Sinaloa and Nine Other Current and Former Mexican Officials Charged with Drug Trafficking and Weapons Offenses," April 29, 2026 (hereinafter DOJ, Governor of Sinaloa).
17.	Presidencia de México, "Versión Estenográfica de la Conferencia de Prensa Matutina de la Presidenta Claudia Sheinbaum Pardo," press conference, August 24, 2026.
18.	International Monetary Fund (IMF), World Economic Outlook Update: Global Economy in Crosscurrents of War and Technology, July 2026.
19.	See, for example, S&P Global, "Mexico Outlook Revised to Negative on Weakening Fiscal Flexibility; 'BBB' Foreign Currency Rating Affirmed," May 12, 2026.
20.	Gobierno de México, "Plan México: Equitable and Sustainable Economic Development Strategy for Shared Prosperity," https://www.planmexico.gob.mx/; Gobierno de México, Presidencia de la República, "Plan México: Presidenta Claudia Sheinbaum Anuncia Acciones para Facilitar y Dar Certidumbre a la Inversión," May 4, 2026.
21.	México Como Vamos, Plan México: Acciones Inmediatas para la Inversión, May 7, 2026.
22.	U.S. Department of State, Investment Climate Statement: Mexico, 2025, pp. 30-31, 38.
23.	CRS Report R48960, U.S. Foreign Policy in the Western Hemisphere: Issues for Congress, coordinated by Peter J. Meyer, Joshua Klein, and Kyla H. Kitamura.
24.	For example, see the section "A booming sector built on foreign inputs" in Ernesto Stein and Phil Lovegren, "Mexico Can Turn USMCA Pressure into an Industrial Opportunity," Atlantic Council, July 23, 2026.
25.	For background on former President López Obrador's foreign policy, see Olga Pellicer, "Why Mexico Is a Quiet Presence on the World Stage," Americas Quarterly, April 25, 2023.
26.	For analysis of the Sheinbaum Administration's foreign policy, see Gerardo Rodríguez, "Política Exterior: Balance a Dos Años," El Heraldo de México, September 7, 2026.
27.	Julián Ventura, "After a Landslide Victory, Global Engagement Is a Necessity and an Opportunity for Mexico's Next President," Chatham House, June 4, 2024; Olga Pellicer et al., "Hoja de Ruta Estratégica para los Desafíos de la Política Exterior Mexicana en 2026," Foreign Affairs Latinoamérica, May 2026.
28.	R. Evan Ellis, The Sheinbaum Administration's Cautious Engagement with China in Mexico, Expediente Abierto, July 28, 2026.
29.	Christopher S. Chivvis and Beatrix Geaghan-Breiner, Mexico in the Emerging World Order, Carnegie Endowment for International Peace, March 25, 2024.
30.	Associated Press (AP), "Mexican President Says Her Country Has Paused Oil Shipments to Cuba," January 28, 2026. For more on Cuba, see CRS In Focus IF10045, Cuba: U.S. Policy Overview, by Joshua Klein.
31.	Maria Abi-Habib, "The U.S. Gave Mexico a List of Russian Spies. Mexico Let Them Stay," New York Times, December 8, 2025.
32.	CRS Insight IN12618, U.S. Capture of Venezuela's Nicolás Maduro: Considerations for Congress; Gobierno de México, "Mexico Condemns Military Intervention in Venezuela," Press Release No. 001/2026, January 3, 2026.
33.	Patrick J. McDonnell, "Mexico's Sheinbaum Travels to Barcelona for 'Progressive' Confab, Tension-Easing Talks with Spain," Los Angeles Times, April 18, 2026.
34.	Rebecca Montecinos, "Sheinbaum Says Nicaragua Must Choose Its Own Fate. A Rights Group Asks: Choose with What Ballot?" MSN, September 6, 2026.
35.	Reuters, "Trump Threatens Mexico with 5% Tariff Increase over Water Dispute," December 8, 2025. The 1944 U.S.-Mexico Water Treaty governs the usage of waters of the Colorado and Tijuana rivers and of the Rio Grande. A copy is available at https://www.usbr.gov/lc/region/pao/pdfiles/mextrety.pdf.
36.	U.S. Department of Agriculture (USDA), "Statement by Secretary of State Marco Rubio and Secretary of Agriculture Brooke Rollins," February 3, 2026. See CRS In Focus IF12976, 1944 U.S.-Mexico Water Treaty: Issues in the 119th Congress, by Charles V. Stern, Elena H. Humphreys, and Nicole T. Carter.
37.	Office of the U.S. Trade Representative (USTR), United States-Mexico Critical Minerals Action Plan, February 3, 2026; U.S. Department of State, U.S. Mission to Mexico, "The United States and Mexico Expand Cooperation to Combat New World Screwworm," June 24, 2026. See also CRS Report R49124, New World Screwworm: Background and Issues for Congress, by Eleni G. Bickell and Christine Whitt.
38.	Reuters, "Mexico Files Criminal Complaints in US over Migrant Deaths in Custody," July 14, 2026; Presidencia de México, "Versión Estenográfica de la Conferencia de Prensa Matutina de la Presidenta Claudia Sheinbaum Pardo," press conference, July 13, 2026.
39.	José de Córdoba, "US Cancels Visa for Son of Former Mexican President, Straining Ties," Wall Street Journal, August 15, 2026; Presidencia de México, "Versión Estenográfica de la Conferencia de Prensa Matutina de la Presidenta Claudia Sheinbaum Pardo," press conference, August 14, 2026.
40.	Executive Office of the President, Proclamation 10886 of January 20, 2025, "Declaring a National Emergency at the Southern Border of the United States," 90 Federal Register 8327, January 29, 2025 (hereinafter Executive Office of the President, Proclamation 10886); U.S. Department of Homeland Security (DHS), "Notice of Implementation of Additional Duties on Products of Mexico Pursuant to the President's Executive Order 14194," 90 Federal Register 11429, March 6, 2025.
41.	For more information, see CRS Legal Sidebar LSB11398, Supreme Court Rules Against Tariffs Imposed Under the International Emergency Economic Powers Act (IEEPA), by Christopher T. Zirpoli.
42.	U.S. Department of State, "Foreign Terrorist Organization Designations of Tren de Aragua, Mara Salvatrucha, Cartel de Sinaloa, Cartel de Jalisco Nueva Generacion, Carteles Unidos, Cartel del Noreste, Cartel del Golfo, and La Nueva Familia Michoacana," 90 Federal Register 10030, February 20, 2025; U.S. Department of State, "Foreign Terrorist Organization Designation of Juarez Cartel and Los Viagras," 91 Federal Register 43721, July 16, 2026.
43.	U.S. Department of State, "Degrading CJNG: Announcing over $100 Million in Reward Offers and Visa Restrictions," August 5, 2026.
44.	Diego Oré et al., "US Revokes Visas of over 50 Mexican Politicians in New Drug War Front," Reuters, October 14, 2025.
45.	DOJ, Governor of Sinaloa.
46.	U.S. Department of the Treasury (Treasury), Financial Crimes Enforcement Network (FinCEN), "FinCEN Supplemental Alert on Fuel Smuggling and Tax Evasion Schemes on the Southern Border Associated with Mexico-Based Cartels," FIN-2026-Alert003, June 30, 2026.
47.	Ana Isabel Martinez and Raul Cortes, "Mexico's Sheinbaum Says Proof Needed After US Charges Sinaloa Governor for Cartel Ties," Reuters, April 30, 2026; Diego Oré, "Exclusive – Mexico's Sheinbaum Tells Her Party That Officials Should Quit if Tied to Corruption, Sources Say," Reuters, May 21, 2026.
48.	CRS In Focus IF13044, Defense Primer: U.S. Northern Command (USNORTHCOM), by Robert Switzer and Clare Ribando Seelke. White House, National Security Strategy, November 2025; U.S. Department of Defense (DOD), 2026 National Defense Strategy, January 2026 (hereinafter DOD, 2026 National Defense). DOD is "using a secondary Department of War designation" under Executive Order 14347 dated September 5, 2025. White House, United States Counterterrorism Strategy, May 2026.
49.	DOD, 2026 National Defense.
50.	The declaration aims to enhance regional security and cooperation on "border security; countering narco-terrorism and trafficking; securing critical infrastructure; and other areas as mutually determined." DOD, "Americas Counter Cartel Conference Joint Security Declaration," March 5, 2026.
51.	DOD, "Secretary of War Pete Hegseth Delivers Remarks at the Americas Counter Cartel Coalition Conference in Panama (as Delivered)," August 12, 2026.
52.	U.S. Drug Enforcement Administration (DEA), 2025 National Drug Threat Assessment, May 2025; CRS In Focus IF10400, Illicit Fentanyl and Mexico's Role, by Shelby B. Senger and Clare Ribando Seelke.
53.	DOJ, Office of Public Affairs, "37 Mexican Nationals Wanted for Serious Crimes Transferred to the United States from Mexico, Including Leaders of Foreign Terrorist Organizations," January 21, 2026.
54.	"García Harfuch Afirma que no hay Distinciones de Partido al Investigar a Funcionarios," Univision, August 20, 2026.
55.	Treasury, "Treasury and Government of Mexico Partners Target Transnational Criminal Organization," November 13, 2025.
56.	Steve Fisher et al., "A Secret FBI Bust Nabbed an Alleged Drug Lord—and Rocked Relations with Mexico," Wall Street Journal, January 28, 2026; CNN, "U.S. Citizens Urged to 'Shelter in Place' After Mexico Drug Lord's Killing Sparks Wave of Violence," February 23, 2026.
57.	U.S. Department of State, "Joint Statement on Security Cooperation Between the United States and Mexico," September 3, 2025.
58.	Gobierno de México, "Mexico-United States Bilateral Implementation Group," Press Release 124/2026, June 12, 2026.
59.	Fabiola Sánchez, "Mexico's Sheinbaum Rules Out a Conflict with US over 2 CIA Agents Killed in Chihuahua Accident," AP, April 27, 2026.
60.	Natasha Bertrand et al., "Exclusive: CIA Escalates Secret War on Cartels with Deadly Operations Inside Mexico," CNN, May 12, 2026; Julian E. Barnes and Maria Abi-Habib, "U.S. and Mexican Officials Deny C.I.A. Had Lethal Role in Mexico Operation," New York Times, May 12, 2026.
61.	Ghaleb Krame et al., "Sheinbaum's Dilemma: Mexico's Security Choices After FTO Designation," Journal of Strategic Security, vol. 19, no. 1 (2026).
62.	Vanda Felbab-Brown, How Could the Mexican Government Respond to US Military Actions?, Brookings Institution, January 21, 2026.
63.	U.S. Department of State, Department of State, Foreign Operations, and Related Programs, Fiscal Years FY2016 through FY2025.
64.	U.S. Department of State, Department of State, Foreign Operations, and Related Programs, Fiscal Year 2027, April 2026.
65.	DOD is currently "using a secondary Department of War designation" under Executive Order 14347 dated September 5, 2025.
66.	CRS Insight IN12567, The Trump Administration's Foreign Assistance Review: Nuts and Bolts Issues and Congress's Role, by Nick M. Brown.
67.	Those conditions include reducing the amount of fentanyl and other synthetic opioids arriving at the U.S.-Mexico border, dismantling and holding accountable transnational criminal organizations, supporting join counterdrug operations and intelligence-sharing with the United States, respecting extradition requests sought by the United States, and increasing counterdrug engagement at the federal and state levels.
68.	Eric Martin, "Trump Presses Mexico's Sheinbaum to Stop Migrants at U.S. Border," Bloomberg, August 27, 2026.
69.	See CRS In Focus IF13295, Immigration Removals to Third Countries, by Audrey Singer, William A. Kandel, and Hillel R. Smith; CRS In Focus IF10215, Mexico's Migration Control Efforts, by Clare Ribando Seelke; Sonia Pérez D. et al., "More Than 2,300 Mexicans Sent to Guatemala and Honduras as Trump Ramps Up Third-Country Deportations," AP, August 21, 2026.
70.	Executive Office of the President, Proclamation 10886.
71.	Executive Order 14165 of January 20, 2025, "Securing Our Borders," 90 Federal Register 8467, January 30, 2025.
72.	White House, "Military Mission for Sealing the Southern Border of the United States and Repelling Invasions," Presidential Memorandum/NSPM-4, April 11, 2025; U.S. Northern Command, "Operation Ardent Vanguard," https://www.northcom.mil/BorderSecurity/#national-defense-areas.
73.	DHS, U.S. Customs and Border Protection, "Southwest Land Border Encounters," https://www.cbp.gov/newsroom/stats/southwest-land-border-encounters.
74.	Gobierno de México, Secretaría de Relaciones Exteriores, "The Consular Network in the U.S. Expands Services to Assist, Protect and Defend Mexican Nationals," January 20, 2025; Presidencia de México, "Versión Estenográfica de la Conferencia de Prensa Matutina de la Presidenta Claudia Sheinbaum Pardo," press conference, July 13, 2026; Gobierno de México, "México te Abraza," https://portales.segob.gob.mx/es/PoliticaMigratoria/Mexico-te-abraza.
75.	Gobierno de México, "Versión Estenográfica. Conferencia de Prensa de la Presidenta Claudia Sheinbaum Pardo del 14 de Agosto de 2026," press conference, August 14, 2026.
76.	Kevin Sieff, "A Reverse Ellis Island," The Atlantic, August 14, 2026.
77.	Daniel Gonzalez, "Under New Strategy, U.S. Flies Deportees to Southern Tip of Mexico," Pulitzer Center, October 30, 2025.
78.	UN Refugee Agency (UNHCR), "Mexico: Executive Summary: 2026," https://www.unhcr.org/where-we-work/countries/mexico.
79.	Mexican Government and UNHCR, "Operational Data Portal," https://data.unhcr.org/en/country/mex.
80.	According to UNHCR, donors have met 19% of its FY2026 financial requirements for Mexico. UNHCR, "Funding Update: Mexico," August 31, 2026; Adam Isacson et al., Banished to the South: The Human Cost of Deportation, Washington Office on Latin America, CDH Fray Matías, and Kino Border Initiative, August 26, 2026.
81.	For more information on the joint review, see CRS Report R48787, USMCA Joint Review: Process and Role of Congress, by Kyla H. Kitamura and Danielle M. Trachtenberg.
82.	USTR, "Ambassador Greer Issues Statement on the USMCA Joint Review," July 1, 2026.
83.	For more information, see CRS In Focus IF11175, U.S.-Mexico Trade Relations, by Danielle M. Trachtenberg.
84.	Data on trade in goods is from the U.S. International Trade Commission, "Dataweb: U.S. Trade and Tariff Data," https://dataweb.usitc.gov (hereinafter USITC Dataweb).
85.	USITC Dataweb.
86.	USITC Dataweb.
87.	Production sharing occurs when the manufacturing of a product is split across international borders. An automobile produced in the United States, for example, can have thousands of parts that come from various Mexican locations or different U.S. states.
88.	Data on trade in services is from U.S. Bureau of Economic Analysis (BEA), "International Transactions, Services, and Investment Position (IIP) Tables," https://bea.gov/itable/international-transactions-services-and-investment-position.
89.	BEA, "International Transactions, Services, and Investment Position (IIP) Tables," https://bea.gov/itable/international-transactions-services-and-investment-position.
90.	Data on FDI flows into Mexico are from Gobierno de México, Data México, https://www.economia.gob.mx/datamexico/en (Data México).
91.	BEA, "Direct Investment by Country and Industry," https://www.bea.gov/data/intl-trade-investment/direct-investment-country-and-industry.
92.	USTR, "Notice of Actions in Section 301 Investigations of Acts, Policies, and Practices of Various Economies Related to the Failure of Each Economy to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor," 91 Federal Register 47318, July 28, 2026. For more information on rates under Section 232, see CRS In Focus IF13006, Section 232 of the Trade Expansion Act of 1962, by Kyla H. Kitamura.
93.	Goods that qualify for duty-free treatment under USMCA generally meet product-specific rules of origin established in the agreement. For more information on rules of origin, see CRS In Focus IF10754, Rules of Origin, by Liana Wong.
94.	CRS calculations using trade data from USITC Dataweb.
95.	For more information, see CRS In Focus IF13006, Section 232 of the Trade Expansion Act of 1962, by Kyla H. Kitamura.
96.	For more information, see CRS Insight IN12519, Section 232 Tariffs on Steel and Aluminum, by Kyla H. Kitamura.
97.	For more information, see CRS Insight IN12545, Section 232 Automotive Tariffs: Issues for Congress, by Kyla H. Kitamura.
98.	U.S. Department of Commerce Bureau of Industry and Security, "Section 232 Investigations," https://www.bis.gov/about-bis/bis-leadership-and-offices/sies/section-232-investigations.
99.	For more information, see CRS Legal Sidebar LSB11398, Supreme Court Rules Against Tariffs Imposed Under the International Emergency Economic Powers Act (IEEPA), by Christopher T. Zirpoli.
100.	Office of the U.S. Trade Representative (USTR), "Ambassador Greer Issues Statement on Supreme Court IEEPA Decision," press release, February 20, 2026.
101.	Proclamation 11012 of February 20, 2026, "Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems," 91 Federal Register 9339, February 25, 2026. For more information, see CRS In Focus IF13199, Section 122 of the Trade Act of 1974, by Christopher A. Casey, Danielle M. Trachtenberg, and Christopher T. Zirpoli.
102.	19 U.S.C. 2411(a)(1)(B)(ii) and 19 U.S.C. 2411(b)(1).
103.	USTR, "Initiation of Section 301 Investigations: Acts, Policies, and Practices of Certain Economies Relating to Structural Excess Capacity and Production in Manufacturing Sectors," 91 Federal Register 12886, March 17, 2026; and "Initiation of Section 301 Investigations of Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor," 91 Federal Register 12884, March 17, 2026.
104.	For more information on the Section 301 forced labor investigation, see CRS Insight IN12672, Section 301 Investigation—Forced Labor and Import Policies of U.S. Trading Partners, by Christopher A. Casey, Cathleen D. Cimino-Isaacs, and Danielle M. Trachtenberg.
105.	USTR, "Notice of Actions in Section 301 Investigations of Acts, Policies, and Practices of Various Economies Related to the Failure of Each Economy to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor," 91 Federal Register 47318, July 28, 2026.
106.	Acuerdo que establece las mercancías cuya importación está sujeta a regulación a cargo de la Secretaría del Trabajo y Previsión Social, Diario Oficial de la Federación [DOF] 17-02-2023 (Mex.), https://www.dof.gob.mx/nota_detalle.php?codigo=5679955&fecha=17/02/2023.
107.	Gobierno de México, Ministry of Economy in Mexico, Attaché Office in Washington, DC, "Post-Hearing Submission of the Government of Mexico in the Section 301 Investigation of Acts, Policies, and Practices of Certain Economies Relating to Structural Excess Capacity and Production in Manufacturing Sectors," May 15, 2026; and Gobierno de México, Ministry of Economy in Mexico, Attaché Office in Washington, DC, "Oral Statement of the Government of Mexico USTR Section 301 Hearing – Forced Labor-Related Imports," July 7, 2026.
108.	For more information on the joint review process and role for Congress, see CRS Report R48787, USMCA Joint Review: Process and Role of Congress, by Kyla H. Kitamura and Danielle M. Trachtenberg.
109.	USMCA, art. 34.7.4 and art. 34.7.5, available at https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/34_Final_Provisions.pdf.
110.	USTR, "Ambassador Greer Issues Statement on the USMCA Joint Review," July 1, 2026; Gobierno de México, Secretaría de Economía, "Participación del secretario de Economía, Marcelo Ebrard, durante la Mañanera del Pueblo," Versión estenográfica, July 2, 2026; and letter from Dominic LeBlanc to Ambassador Greer and Secretary Ebrard, June 1, 2026.
111.	P.L. 116-113 §611(a).
112.	P.L. 116-113 §611(d)(2).
113.	Remarks by USTR Jamieson Greer, "Opening Statement for House Ways and Means and Senate Finance Committees," December 16 and 17, 2025, https://ustr.gov/sites/default/files/files/Press/Releases/2025/Ambassador%20Greer%20Reported%20to%20Congress%20on%20the%20Operation%20of%20the%20USMCA.pdf.
114.	See, for example, Diego Marroquín Bitar and Diana Paz García, "Sinaloa Governor Indicted: USMCA, Cartels, and the Future of U.S.-Mexico Trade," Center for Strategic and International Studies, May 6, 2026.
115.	Remarks by USTR Jamieson Greer, "Opening Statement for House Ways and Means and Senate Finance Committees," December 16 and 17, 2025.
116.	USTR, "Joint Statement from Ambassador Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard," press release, April 20, 2026, and USTR, "The United States and Mexico Launch Review Process of the USMCA," press release, March 5, 2026.
117.	White House, Office of Trade and Manufacturing Policy, "The Great Transshipment Scam," August 2026, and Gavin Bade and Santiago Pérez, "U.S. Pressures Mexico to Box Out China's AI Hardware Exports," Wall Street Journal, September 15, 2026.
118.	Ivette Saldaña, "Ebrard asegura que México no triangula productos asiáticos; acusa argumentos por negociación del T-MEC," El Universal, August 21, 2026.
119.	Gobierno de México, "Decreto por el que se reforman diversas fracciones arancelarias de la Tarifa de la Ley de los Impuestos Generales de Importación y de Exportación," Diario Oficial de la Federación, December 29, 2025.
120.	Senado de la República, Estados Unidos Mexicanos, "Turnan a comisiones del Senado la iniciativa para reformar la Ley de Inversíon Extranjera," September 2, 2026.
121.	Data México.
122.	USTR, "Joint Statement from Ambassador Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard," press release, April 20, 2026.
123.	USTR, "Joint Statement from Ambassador Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard," press release, July 23, 2026.
124.	USTR, "The United States and Mexico Announce Next Steps in Bilateral Discussions in Advance of the USMCA Joint Review," press release, March 18, 2026, and USTR, "Joint Statement from Ambassador Jamieson Greer and Mexican Secretary of Economy Marcelo Ebrard," press release, April 20, 2026.
125.	Remarks by USTR Greer, "US Trade Representative Greer on the Future of Trade Policy," Hudson Institute, April 7, 2026, https://www.hudson.org/events/us-trade-representative-jamieson-greer-future-trade-policy.
126.	U.S. Congress, Senate Committee on Finance, The President's 2026 Trade Policy Agenda, hearing, 119th Cong., 2nd sess., July 22, 2026, https://www.finance.senate.gov/hearings/rescheduled-the-presidents-2026-trade-policy-agenda.
127.	Diego Marroquín Bitar and Juan Carlos Baker Pineda, "What Would an Interim U.S.-Mexico Trade Deal Actually Involve?," Center for Strategic and International Studies, September 21, 2026.
128.	For more information, see CRS Report R49349, U.S. Tariffs on Canadian Imports: Section 338 of the Tariff Act of 1930, by Kyla H. Kitamura.
129.	For more information, see CRS Report R47679, Congressional and Executive Authority Over Foreign Trade Agreements, by Christopher T. Zirpoli.
130.	See, for example, Congressman Frank J. Mrvan, "Congressional Steel Caucus Sends Letter to Administration in Support of Section 232 Steel Tariffs," press release, August 21, 2025.