Perspectives on the US-Mexico relationship, what next?

200 years and evolving

These days most analyses of the relationship between Mexico and the United States concentrate on short-term developments, particularly regarding the future of USMCA and the potential for unilateral law enforcement or even military action by the U.S. within Mexican territory targeting cartels. This focus is understandable, given that—as was the case eight years ago—the second Trump administration has disrupted bilateral relations and introduced significant uncertainty. Nonetheless, it is also important to consider the overall state of the relationship with a little more perspective as well as possible developments over the longer term.

The two centuries of diplomatic relations have been marked by geographic proximity, structural asymmetry, and a notable degree of interdependence. Through four different phases, the relationship has witnessed conflict and agreement as well as achievement and setbacks.¹ The initial phase extended from Mexico’s recognition as an independent nation to World War II. Throughout this period, interactions were largely adversarial and shaped by the vulnerability of the Mexican state and the territorial ambitions of the United States. Significant events included armed conflict resulting in the loss of half of Mexico’s territory,² U.S. intervention in the removal of President Francisco I. Madero³—the first democratically elected president, bombardment of the port of Veracruz,⁴ Francisco Villa’s raid of Columbus, New Mexico,⁵ and the nationalization of oil companies by the Mexican government in 1938.⁶

World War II marked a significant turning point in the relationship opening a second phase. The exigencies of war created an increased demand in the United States for raw materials, labor, and security. In 1942, Mexico declared war on the Axis powers and contributed alongside the United States⁷—an effort not widely recognized by the American public. Additionally, Mexico supported the war effort by supplying labor through the Bracero Program and providing goods from its industrial sector.⁸ In 1943, President Franklin D. Roosevelt visited President Ávila Camacho in Monterrey, Nuevo León, where the American president spoke—likely for the first time—of the interdependence between both nations and their resources.⁹

During the Cold War, Mexico and the United States enjoyed a new equilibrium. Mexico’s Third World diplomatic activism and its flirting with Latin American governments from the political left were less important to the U.S. than a shared interest of keeping socialism out of Mexico. The so-called “war on drugs” declared by President Richard Nixon in 1971 naturally had an impact on the bilateral relationship that continues to this day. Indeed, the fight against drug trafficking remains one of the main sources of friction. It is during this second phase that the relationship begins to take shape with a tendency to discover interdependence and alignment of interests, and to manage if not solve differences.

NAFTA marked the commencement of a third phase and produced two notable impacts on the relationship. First, it enhanced economic integration through increased trade and investment flows, established regulatory frameworks, and fostered comprehensive production and supply chains. Second, it contributed to more robust cooperation across various domains, including security and law enforcement, migration, educational exchanges, border management, and infrastructure development. The ensuing 25 years following NAFTA can be characterized as shifting from the paradigm of “distant neighbors” to the construction of a “strategic partnership”—a term that became increasingly prevalent in official, business, and academic discourse on both sides of the border.

The Mexico–United States relationship has entered a fourth phase, beginning with the first presidency of Donald Trump and the rise of Andrés Manuel López Obrador and Morena in Mexico. This period is broadly defined by a dynamic in which economic interdependence exists alongside significant political differences. Several factors contribute to the complexity of this stage: A shift in U.S. foreign and national security policy away from promoting a rules-based international order toward a “balance of power” arrangement; a reassertion of U.S. influence in the Western Hemisphere—described by some as a renewed Monroe Doctrine; the emergence of a new administration in Mexico under Morena, characterized by an economic nationalism does not necessarily support the development of a strategic partnership with the United States; evolving security concerns encompassing both non-state threats such as organized crime and fentanyl trafficking, as well as conventional risks within a changing geopolitical landscape; and finally a new context in the U.S. where illegal immigration is not only seen by Americans as a serious concern and challenge for the United States, but also as a threat to the social fabric of the country.

The future trajectory of the relationship under this new phase remains uncertain, although it has demonstrated considerable resilience and continued “along its tracks.” Furthermore, it is reasonable to anticipate that the elements discussed above will largely persist beyond a second Trump administration, given the structural changes occurring in both the U.S. political environment and the international order.

Significant stakes in the relationship

The resilience demonstrated by the bilateral relationship in recent years can be attributed, in part, to successive Mexican administrations—since 2017—advocating for Mexico’s significance to U.S. economic and security interests, rather than directly confronting President Trump. Notably, various U.S. political stakeholders, including governors, legislators, business leaders, and academic figures, have played a significant role in this process. Moreover, the enduring strength of the relationship is also supported by its substantial scope and depth.

Ties between Mexico and the United States are widely recognized as among the most complex, dynamic, and significant globally. This characterization is substantiated by the long 3,169 kilometers border. The U.S.-Mexico border ranks as one of the most active, necessitating a wide array of formal and informal arrangements to address all sorts of challenges, including the management of over 50 ports of entry and international bridges. Each day, approximately 1 million individuals and 40,000 trucks cross this border. ¹⁰At least 12 metropolitan areas along the border can be considered binational, with their daily activities frequently extending across national boundaries. Additionally, the United States and Mexico jointly manage the Colorado and Rio Grande River basins under the terms of a 1944 treaty, resources vital to communities and businesses on both sides.¹¹

In 2025, Mexico became not only the top trading partner of the United States, above China and outpacing Canada, for the first time in 30 years, but also the most important destination of U.S. exports worldwide. Indeed, according to the U.S. Census Bureau, bilateral trade reached almost 840 billion dollars during 2024¹² and, through September 2025, remained at a healthy 653 billion despite the imposition of different tariffs beginning in February 2025.¹³ Geographical proximity, lower cost, and integrated supply chains explain this resilience.

Cross-border investment is also important. The United States is Mexico’s top foreign investor. According to the Bureau of Economic Analysis, in 2024 American direct investment (at historical cost basis) was estimated at $160 billion, while Mexican investment in the U.S. was $61 billion.¹⁴ The case for mutually beneficial investment flows is even stronger when normalizing these figures by the size of the economy and population. With our own preliminary estimates, U.S. direct investment in Mexico represented approximately 0.55% of its GDP or $446 per capita, and 3.4% of Mexico’s GDP or $471 per capita.¹⁵

In addition to trade and investment, there are significant flows of people for tourism and business purposes. More Americans visit Mexico each year than any other nationality (40 million in 2024)¹⁶ while Mexicans are the second-largest group of international visitors to the United States (20 million).¹⁷

It is estimated that approximately 37 million Hispanics of Mexican origin currently reside in the United States, of which about 11 million were born in Mexico.¹⁸ At the same time, the U.S. Department of State estimates that roughly 1.6 million Americans live in Mexico.¹⁹

Taking a longer-term perspective

As previously noted, the year 2026 may represent a significant juncture in U.S.–Mexico relations. During the second Trump administration, illegal immigration from Mexico into the United States—a persistent issue—has declined to historically low levels, relieving some bilateral pressures.²⁰ Nonetheless, the future of the USMCA, currently undergoing statutory review, remains a key concern. While it is likely that the agreement will persist, two general scenarios are possible: Either its formal extension occurs in July of this year with certain concessions and amendments to the United States, or the agreement continues without a formal extension beyond the July deadline—a status that is legally permissible—with the Trump administration maintaining strategic uncertainty on trade and other aspects of the relationship as leverage.

In terms of security, although the possibility of unilateral law enforcement or military measures by the Trump administration cannot be entirely ruled out, such a scenario still appears unlikely. The probability of this scenario in the near term will be predominantly determined by the effectiveness of ongoing security collaboration and the prevailing political climate within the United States.

When assessing the potential long-term trajectory of the relationship, three key questions appear particularly pertinent: 1) Whether Mexico and the United States can establish a more comprehensive and effective framework for security cooperation; 2) Whether both nations can achieve a stable and mutually beneficial trade relationship in the new world trade environment; and 3) How Mexico will navigate its position within the evolving geopolitical landscape.

A month after taking office, the Trump administration designated Mexican cartels as international terrorist organizations.²¹ Subsequently, it asserted that drug trafficking organizations “have an intolerable alliance with the government of Mexico.”²² On several occasions, President Trump has suggested that Mexico is effectively under the control of cartel groups.²³ Concurrently, Secretary of State Marco Rubio has repeatedly stated that bilateral security cooperation is at unprecedented levels.²⁴ This apparent contradiction indicates that security collaboration may be achieving certain objectives, while U.S. authorities might intentionally maintain ambiguity to strengthen their negotiating position and pursue increased cooperation.

On the Mexican side, inconsistencies are also observed. Mr. López Obrador and President Claudia Sheinbaum have criticized previous administrations’ approaches to security cooperation with the United States, contending that these policies compromised Mexican sovereignty and national interests. This criticism extended to the Merida Initiative, which was the primary mechanism for security collaboration from 2008 to 2021.²⁵ However, Morena administrations have continued cooperation and, in some cases, exceeded prior practices. Notably, there have been significant concessions to the U.S., such as the transfer of criminals not only through formal extradition processes but also via “expulsion” during 2025,²⁶ as well as authorization for U.S. aerial surveillance over Mexican territory to collect intelligence—apparently without Mexican direct participation.²⁷ Under a mantra of “cooperation yes, subordination no,” the Morena government seems to have established an ad hoc and mostly under-the-radar cooperation scheme.

These circumstances necessitate an examination of the potential progression of bilateral security and law enforcement cooperation in a way that is politically viable, effective, and enduring for both governments. Providing a comprehensive response to this issue exceeds the scope of this essay; however, two collaborative approaches can be identified: The establishment of a joint binational customs agency or the creation of a formal security agreement.

Bilateral cooperation regarding customs has a longstanding history, which intensified following the September 11, 2001 terrorist attacks as trade and security priorities became increasingly interlinked. This partnership has yielded meaningful, though still limited, advancements in areas such as information sharing, pre-inspection processes, joint customs clearance procedures, and the planning and management of international crossings and bridges. Persistent and evolving security threats require more sophisticated and coordinated approaches. The integration of advanced technology presents significant opportunities to enhance the effectiveness of customs operations. Among the most critical issues on the bilateral security agenda are the illicit trafficking of synthetic drugs—including fentanyl and its precursors—and firearms, both of which pose substantial challenges for customs agencies at the shared border.

Overall, Mexico and the United States have engaged in generally equitable, though sometimes inconsistent, security cooperation over the past 25 years. This cooperative relationship has included training, the exchange of information and intelligence, financial aid to Mexico for equipment, professional development, institutional strengthening, coordinated law enforcement operations, and formal judicial assistance in particular cases. Concerns in Mexico about deeper collaboration center on issues of national sovereignty, while the United States has expressed dissatisfaction regarding the effectiveness of joint efforts. Both countries have proceeded with caution due to mutual distrust: The United States’ reservations are principally related to ongoing corruption associated with organized crime, in some cases involving senior government officials,²⁸ whereas Mexico’s apprehension is largely rooted in the legacy of previous unilateral actions, and the reluctance of U.S. authorities to openly address and cooperate on matters occurring within their own borders after illicit substances have entered.

In recent years, some security experts have proposed the establishment of a dedicated security agreement.²⁹ This proposal has merit. It could offer significant advantages to both parties; the United States would benefit from increased certainty and stability of the cooperation, independent of political changes within Mexico, and Mexico would gain from a legally binding framework that clearly delineates the boundaries of collaboration. Although unilateral actions by the United States on Mexican territory remain a point of discussion.

With respect to trade and the USMCA, Mexico must understand that retaining preferential access to the U.S. market will require further strategic alignment with the United States. In the present context and for the foreseeable future, this alignment implies a fair level of cooperation and information exchange which can aid in vetting foreign investment in Mexico on goods and sectors that pose potential security risks (such as critical minerals, rare earths, strategic infrastructure, and communications), and mechanisms to avoid using Mexico for transshipments into the United States. The issue of circumvention can be addressed through the rules of origin clause of the USMCA under review. In return, the United States should unequivocally guarantee that Mexico will maintain preferential access with respect to other countries and especially its competitors.

Turning to geopolitics, while it is challenging to precisely characterize the fluid nature of international relations, forecasting the future global order—or potential disorder—proves even more complex. Nations such as Mexico, which possess notable economic significance and latent political influence, and whose military capacity is focused on homeland defense, often face difficulties in defining their international roles and navigating relations with the United States. One development that seems increasingly likely and holds relevance for Mexico is an intent by the United States to exert more influence throughout the Americas in the coming years. This prospect underscores the need for a thorough discussion within Mexico concerning two key issues.

Initially, there is the prospect that the current United States strategy regarding the hemisphere may develop into a “coalition of the willing” focused on trade and defense. While Morena administrations have supported further economic integration across the Americas, such integration appears unrealistic under existing geopolitical circumstances. It is also notable that Mexico declared its intention to withdraw from the Inter-American Treaty of Reciprocal Assistance (TIAR) in 2001—just days prior to the terrorist attacks on the United States—and completed its withdrawal formally in 2004.³⁰ This decision was originally motivated by the desire to adopt a multidimensional approach to hemispheric security and, at that time, may have seemed relatively insignificant. However, in retrospect, its implications could be more substantial.

Furthermore, Mexican officials may conduct an impartial assessment of the potential costs and advantages associated with engaging in dialogue with their American counterparts regarding Major Non-NATO Ally (MNNA) status. As outlined by the State Department, this designation offers certain privileges related to defense, trade, and security cooperation for foreign partners. While MNNA status does not include binding security commitments, it serves as a significant indicator of the close bilateral relationship between the United States and designated countries.

In summary, a consistent aim of Mexican foreign policy has been to maintain a prudent level of autonomy from the foreign policy direction of the United States. This approach is neither unexpected nor objectionable to Americans, as many nations have pursued similar objectives throughout history. Likewise, it would be advantageous for Mexico to carefully evaluate when such independence truly aligns with its national interests.