Why it Matters

Mexican drug cartels have evolved from border smugglers into global criminal empires operating in over 40 countries, and the Trump administration is treating them as a national security threat. The Senate narcotics hearing on June 24 revealed the scope of this expansion and exposed gaps in U.S. enforcement strategy, particularly around money laundering and financial tracking.

The hearing, held by the U.S. Senate Caucus on International Narcotics Control, underscored a stark reality: fentanyl seizures have dropped sharply while cartels expand operations worldwide, and federal agencies lack basic data infrastructure to track drug money.

The Big Picture

Mexican cartels now operate as global business empires that generate billions of dollars in ill-gotten wealth, with operations spanning Africa, Europe, Asia-Pacific, and Australia.

The Sinaloa cartel and Cartel de Jalisco Nueva Generación (CJNG) operate in over 40 countries worldwide, according to the DEA's 2025 threat assessment. They partner with local criminal organizations across multiple continents and send operatives to produce methamphetamine and process cocaine around the globe. In September, counterterrorism officers shut down a meth lab and arrested two men linked to the Sinaloa cartel outside the United States and Mexico, illustrating the cartels' operational reach.

President Trump has made countering cartels a centerpiece of his second administration. The Trump administration designated Mexican drug cartels as foreign terrorist organizations in 2025. The Treasury Department imposed sanctions on individuals and institutions linked to the cartels. President Trump worked to secure the extradition of numerous cartel operatives to face criminal charges in the United States. Mexico deployed approximately 10,000 National Guard troops to the U.S.-Mexico border and conducted an operation that eliminated CJNG leader Nemesio Mencho Osiguera.

Yet enforcement metrics paint a troubling picture. Nationwide fentanyl seizures by the DEA decreased from 77 million pills and 12,000 pounds of fentanyl powder in 2023 to 47 million pills and 10,000 pounds of fentanyl powder in 2025. Customs and Border Protection (CPB) seizures at the border decreased from 26,700 pounds of fentanyl in 2023 to 11,500 pounds of fentanyl in 2025.

The human cost is staggering. An estimated 70,000 Americans died of drug overdoses in 2025. In Rhode Island alone, 219 residents died of drug overdoses in 2025.

What They're Saying

Three witnesses testified on the cartel threat: Chris Urben, a retired DEA official at Nardello & Co.; Michael A. Brown, founder of the Hoplon Consortium, a security and risk advisory firm; and Vanda Felbab-Brown, a senior fellow at The Brookings Institution.

The experts detailed how cartels are adapting faster than U.S. policy can respond. Sinaloa and CJNG drug cooks have exported techniques that can double the output of a methamphetamine lab. Mexican cartel operatives have joined foreign fighter units in Ukraine to acquire first-person view drone capabilities, which they can employ against law enforcement on the southern border.

Cartels are diversifying beyond fentanyl. According to the DEA, fentanyl trafficking rates are still too high, but cartels are seeing increases in trafficking of substances other than fentanyl. The European cocaine market is highly lucrative, with cartels able to fetch approximately double the price for cocaine in Europe compared to sales in the United States. Australia and New Zealand are among the most lucrative drug markets in the world, according to the DEA.

A critical vulnerability emerged in witness testimony: the U.S. government lacks basic financial tracking infrastructure. Globally, less than 1% of illicit financial flows are confiscated each year. Fewer resources are dedicated to money laundering investigations today than 20 years ago.

Sen. Sheldon Whitehouse submitted an opening statement highlighting this gap. He called for stronger data infrastructure for drug seizures, stating the federal government has no central repository for data on drug money seizures. Sen. Whitehouse stated that federal agencies do not collect drug seizure data uniformly and that data is not de-conflicted, meaning two agencies could count the same seizure twice.

The hearing also touched on institutional capture. Mexican cartels offer local gangs and organized criminal groups drugs, money, and weapons. Mexican cartels engage in and facilitate corruption on an enormous scale. Mexican cartels prop up corrupt leaders, infiltrate law enforcement agencies, and undermine institutions.

Political Stakes

The hearing exposed tension between aggressive U.S. enforcement and Mexico's sovereignty concerns. The Claudia Sheinbaum administration has adopted a posture on sovereignty that limits U.S. operations in Mexico, constraining joint enforcement efforts that proved effective under previous Mexican administrations.

For the Trump administration, the hearing reinforced its foreign terrorist organization strategy. The decision to designate Mexican drug trafficking organizations as terrorists marks a new chapter in the debate regarding whether some of Mexico's trafficking organizations bear enough resemblance to terrorist groups to be identified and treated as such for U.S. law enforcement and national security purposes, according to the Congressional Research Service.

Rep. Chip Roy has reintroduced legislation to formally designate drug cartels as Foreign Terrorist Organizations (FTOs). According to Rep. Roy's office, an FTO designation would provide the federal government with additional investigative and intelligence resources, the ability to apply stiffer penalties on FTO affiliates, the ability to revoke visas of FTO members in the U.S., and the ability to freeze FTO assets. The Office of Foreign Assets Control has issued guidance noting that persons engaging in certain transactions with FTO- and Specially Designated Global Terrorist-designated groups face legal liability for support for terrorist activities.

The hearing underscored a policy contradiction: while the Trump administration has escalated cartel designations, Treasury Secretary Bessant suspended enforcement of the law for all entities formed in the United States. This enforcement suspension undermines beneficial ownership disclosure requirements that cover 99% of entities subject to the law, potentially limiting the government's ability to track cartel financial networks domestically.

Yes, but:

Witnesses acknowledged that designation and sanctions alone cannot solve the cartel problem. Vanda Felbab-Brown has extensive published work on cartel dynamics, U.S.-Mexico relations, and the limits of militarized counter-narcotics strategies. Her analysis suggests that treating cartels primarily as a security problem, rather than addressing the demand-side dynamics and institutional weaknesses that enable their expansion, has historically proven insufficient.

Drug traffickers, kleptocrats, and paramilitary groups rely on opaque free trade zones and transparency gaps in trade data. Sen. Whitehouse and Sen. Cassidy co-lead the Clean FTZ Act, which would enhance oversight of foreign free trade zones, including those in West Africa and Southeast Asia. Sen. Whitehouse co-leads the Manifest Modernization Act, which would enhance transparency in import records to help law enforcement take down bad actors.

These legislative approaches target the financial infrastructure enabling cartels rather than enforcement alone, reflecting a recognition that cartels operate through legitimate trade and financial systems.

What's Next:

The 2026 National Drug Control Strategy calls on the federal government to identify, target, and dismantle cartels and foreign networks involved in the distribution and supply of illicit fentanyl and other illicit drugs. The strategy mandates applying the full weight of the United States government to cartel supply networks.

Rep. Roy's cartel FTO legislation faces an uncertain path but has administration backing. The Clean FTZ Act and Manifest Modernization Act offer bipartisan approaches to financial transparency that could advance without requiring the political lift of formal terrorist designations.

U.S. Customs and Border Protection reports that more than 90% of interdicted fentanyl is stopped at Ports of Entry. According to CBP, cartels attempt to smuggle fentanyl primarily in vehicles driven by U.S. citizens at Ports of Entry, suggesting that enforcement at the border alone cannot solve the trafficking problem without addressing the financial networks and supply chain vulnerabilities cartels exploit.

The National Counterterrorism Center states that CJNG traffics drugs to the United States, Australia, and Canada, as well as to many countries in Africa, Asia, Central and South America, and Europe. The center reports that CJNG holds de facto control of the Port of Manzanillo in Colima, Mexico, illustrating the depth of cartel institutional capture in Mexico.

The Bottom Line

The Senate narcotics hearing exposed a U.S. strategy caught between aggressive designation policies and structural enforcement gaps, with Mexico's sovereignty limits constraining the joint operations that once made progress against cartels possible.

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