U.S. designates 8 crime groups as foreign terrorist organizations. How will it affect the border?

Six out of the eight organized crime groups designated as terrorist organizations by the U.S. this week are Mexican cartels. The Trump administration move could have serious implications for businesses — and people — on both sides of the U.S.-Mexico border.

Mexican President Claudia Sheinbaum said although the U.S. made this move without consulting Mexico, it won’t come between Mexico and its sovereignty.

“This can’t become an opportunity for the United States to invade Mexico’s sovereignty,” Sheinbaum said during her daily morning press conference Thursday.

In response to the designations, Sheinbaum is moving to amend Mexico’s constitution. The reforms involve enshrining limits on foreign agents in Mexico, as well as severe penalties for foreigners convicted of smuggling weapons into the country.

Her party’s majority in Mexico’s congress has already made it possible for her to enact several constitutional reforms during her first months in office.

Vanda Felbab-Brown, who studies violent nonstate actors at the Brookings Institute, said the designations happen as officials close to President Donald Trump, as well as the president himself, have threatened possible unilateral U.S. military action into Mexico.

“Which would be a huge blow to Mexico’s sense of sovereignty, national pride, and just jeopardize the bilateral relationship,” she said.

Felbab-Brown said the terrorist designations could also have major economic implications. A foreign terror designation gives the U.S. sweeping power to prosecute people accused of materially supporting cartels.

“Given that so many people, tens of thousands of people in Mexico, work for the cartels, that very many companies, individuals in Mexico have to pay extortion fees to the cartels, the designations could be massive,” she said.

Immigrants in the U.S. who send money home in the form of remittances, for example, could face extra scrutiny even for sending low amounts back to back to family members. U.S. companies who buy agricultural products from Mexican farmers who are forced to pay extortion fees to cartels could also potentially be prosecuted.

“So this could have massively dampening effects on cross border trade, economic integration, supply chains could augment disengagement and divestment from Mexico,” Felbab-Brown said.

Even if prosecutors don’t act, Felbab-Brown said the uncertainty itself could be a blow to Mexico’s economy.

“U.S counterparts could just say look, we don't know whether the prosecutions will be mounted, but we are not going to risk being in the crosshair of the departments of justice and treasury, and just risk being involved with any kind of legal liability,” she said.

But business isn't the only thing the designation is expected to impact.

Jason Houser served as chief of staff for ICE under former President Joe Biden. He says this isn’t the first time the designation has been discussed by federal authorities in the U.S.

“You know, the intelligence community authorities that can now be brought to bear, and military authorities quite frankly, that can be turned on dismantling, disrupting these cartels, is now larger,” he said.

Houser says the designation could also ramp up collaboration and intelligence-sharing with law enforcement in Mexico. But, he says, complexities remain. Elements of organized crime are sometimes embedded into daily life. There’s also the question of how asylum seekers who’ve been impacted by these groups will be treated.

“If there’s people that need safe harbor that want to come here under the law to be protected away from those cartels, we need to allow those people to find passage here,” Houser said.

That’s an issue Robyn Barnard, senior director of refugee advocacy with Human Rights First, has been tracking for a while now. Her group filed suit last year over a border rule enacted during the final days of the Biden administration that required asylum officers to screen asylum seekers for ties to terrorist groups during initial fear screenings.

Her group argues those are complex legal questions asylum seekers already face during their court appearances — and forcing them to happen during initial screenings, sometimes hours after they arrive, could shut people with valid asylum claims out of the system. 

“If you’re a young girl who was raped at knife point by an MS13 gang member and then forced to be in a house with them and serve them food, you could be potentially barred from asylum, because you’re viewed as having provided material support to a terrorist,” she said.

MS13, a street gang that began in Los Angeles in the 1980s and has spread to El Salvador, is among the eight groups listed as terrorist organizations this week. Barnard says it’s not yet clear whether the new designation will include carveouts for actions done under duress, and it could also impact people already in the U.S. seeking asylum.

“So it’s not just forward-looking people who are fleeing and trying to access protection at our border but also people who are here in process already,” she said.

Barnard says the suit her group filed against Biden’s asylum rule is still ongoing.