As long as I’m slaying sacred cows, let’s make sure I don’t miss anything: the border wall has been the biggest boon of the last 50 years to illegal migrants, COVID has made large-scale immigration an economic necessity, and Trump/Biden policies towards immigration are one of the three largest sources of inflation today.
Yeah, that should piss some people off.
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My fourth book, The End of the World Is Just the Beginning: Mapping the Collapse of Globalization is scheduled for release NEXT WEEK (!) on June 14. Immigrants and in-migration are always touchy topics. Allow me to present an excerpt from my upcoming book that is certain to make all Americans – and Mexicans – wince at least once.
In-migration to the United States hit a relative historical low in the 1970s—the decade in which America’s Boomers came of age. For Boomers—an overwhelmingly white demographic—their primary experience with interracial politics was the civil rights movement, a movement that involved people who were already here at a time when the Boomers were young and politically liberal.
In-migration then rose steadily until reaching a near-historical high (again, in relative terms) in the 2010s, at which point the Boomers were nearing retirement and in doing so becoming politically . . . stodgy. In each and every decade as the Boomers aged, the largest single immigrant group was always Mexican. In the minds of many Boomers, Mexicans have long been not simply the “other,” but the “other” that has arrived in ever-larger numbers. A big reason why so many Boomers have been so supportive of nativist politicians such as Donald Trump is that their feelings of shock at the pace of change in American society is not a collective hallucination. It is firmly backed up by reality. This is one piece of the kaleidoscope of why American politics has turned so sharply insular in the 2010s and early 2020s.
But regardless of what you think about Boomers or Mexicans or race or trade or assimilation or borders, there are a couple of thoughts to keep in mind:
First, Mexicans are already in the United States. Whether you’re concerned with what American culture feels like or what the labor market looks like, the great Mexican wave has not only come, it is over. Net migration of Mexicans to the United States peaked in the early 2000s and it has been negative for twelve of the thirteen years since 2008. Just as industrialization and urbanization pushed down birth rates in the developed world, the same process has begun in Mexico, just a few decades later. Today’s Mexican demographic structure suggests it will never again be a net large-scale contributor to American migration. Most of the big migrant flows into the United States since 2014 have instead been from the near-failed Central American states of Honduras, El Salvador, and Guatemala.
Second, even among the most nativist strains of American political thinking, room has been found for Mexicans. In just two years, none other than Donald Trump went from openly condemning Mexican migrants as rapists and “bad hombres” to embracing Mexico in trade and security deals that took bilateral relations to their friendliest and most productive in the history of both republics. Part and parcel of Trump’s renegotiation of the NAFTA accords were clauses that expressly aim to bring manufacturing back to North America. Not to the United States specifically, but to any signatory of the accords. Team Trump added those clauses with Mexico expressly in mind.
On the other side of the equation, Mexican-Americans are turning nativist. The demographic in the United States that consistently polls the most anti-migration is not white Americans, but instead (non-first-generation) Mexican-Americans. They want family reunification, but only for their own families. Never forget that anti-migrant, build-the-wall Donald Trump carried nearly every county on the southern border when running for reelection in 2020.
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Demographics are at the core of what we do here at Zeihan on Geopolitics. More than just a count of population, demographic data–often expressed as a pyramid-shaped graph–can deliver a wealth of information about a society. Is the country in question rapidly aging? Are they going to experience a labor or tax revenue shortage, or a windfall? Coupled with other information, a firm grasp of a demographic profile can help you easily start to put together a country’s geopolitical reality.
Here in the United States, our demographic realities have long been dominated by the Baby Boomers. The largest generation in American history, they have had an outsized impact on the rapid social and economic transformation of the American post-War era. And as the Boomers enter mass retirement, their exit from the labor force is going to have a similar impact on the American economy.
But these impacts won’t be felt equally across the board. Cultural and generational differences mean that in certain fields–such as the trades–American Boomers occupy an outsized percentage of jobs. Society pushed Gen X and millennials toward higher education and away from things like blue-collar work. The United States was able to lean on immigrant labor, chiefly from Mexico, to fill gaps. But it was still mainly Mexican Boomers coming to do the work.
With the Baby Boomers aging out of the labor pool en masse, and with immigrant flows from Mexico unlikely to ever reach their heyday of the late 1990s and early aughts, significant pressures on the US labor market are here to stay. One of the industries most impacted? Trucking. And the reverberations of that reality are being felt across the entire US supply chain.
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The economic lockdowns in the wake of COVID-19 left many without jobs and additional tens of millions of people, including children, without reliable food. Feeding America works with food manufacturers and suppliers to provide meals for those in need and provides direct support to America’s food banks.
Food pantries are facing declining donations from grocery stores with stretched supply chains. At the same time, they are doing what they can to quickly scale their operations to meet demand. But they need donations – they need cash – to do so now.
Feeding America is a great way to help in difficult times.
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Mexicans went to the polls over the weekend. Preliminary results indicate that while incumbent president Andres Manuel Lopez Obrador’s (better known as AMLO) MORENA coalition will maintain a majority in Congress, AMLO did not score a two-thirds majority necessary to amend the constitution.
AMLO’s mix of economic wishful thinking and populist tendencies has resulted in a mix of policies ranging from increasing government control over the energy industry while simultaneously ignoring Mexico’s rising drug violence problems and leaving most local authorities to handle COVID on their own. All this, with a healthy amount of disrespect for any government institutions seeking to place limits on what he views as his vast presidential powers.
However onerous his attempts to install himself as grand-poohbah-god-king of Mexico may be, what his populist measures will ultimately do is impede Mexico’s ability to compete for investment in the coming deglobalization and shift away from China. Mexico’s proximity to the United States and already strong economic integration with its northern neighbor means that this investment and development will still likely come Mexico’s way, but with a lot of unnecessarily delays and extra costs for all involved.
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The economic lockdowns in the wake of COVID-19 left many without jobs and additional tens of millions of people, including children, without reliable food. Feeding America works with food manufacturers and suppliers to provide meals for those in need and provides direct support to America’s food banks.
Food pantries are facing declining donations from grocery stores with stretched supply chains. At the same time, they are doing what they can to quickly scale their operations to meet demand. But they need donations – they need cash – to do so now.
Feeding America is a great way to help in difficult times.
The team at Zeihan on Geopolitics thanks you and hopes you continue to enjoy our work.
Let’s rile everyone up with an uncomfortable statement: Mexico should be a failed state. The issue isn’t cultural, political, or policy-driven, but rather, geographical. Most powers of significance share two geographic features:
First, they’re in the temperate climate zones, therefore boasting reliable rainfall, warm seasons for growing crops, cold seasons for deterring pests, recharging the soil, and avoiding extreme heat and cold that wrecks health and infrastructure.
Second, they’re pretty flat. Flatness simplifies the construction and maintenance of infrastructure. It means their cities can spread out, and keep land prices low. It means agriculture and industry alike can establish mass scaled economies, keeping food, power, and manufactured goods’ prices within reach. This not only boosts national power, but it also provides a backstop to help keep economic inequality-related issues under control.
Mexico has none of that.
Its north is a barren desert. That means agriculture is only possible by diverting the region’s few rivers. Its south is a rugged jungle, which reduces the general population to subsistence living. Plus, multiple mountain chains crisscross the country, with the two largest (the Sierra Madres Occidental and Oriental) prominently jutting up from the coast, complicating interior access to the one feature Mexico has going for it: its extensive coastline. All those mountains shatter Mexico’s people into multiple, often competing, zones.
Any of these features would be severely problematic, all sufficient enough to keep Mexico out of the ranks as one of the major powers. But all of them? Together? Across a territory as big as Spain, France, Germany, and Poland combined? With all these points, Mexico, arguably, has the world’s worst geography from an economic-development point of view. Mexico shouldn’t just be a failed state, it should exist in a degree of organizational chaos rivaling Afghanistan.
Yet not only is Mexico not a failed state, rather it’s the world’s 15th richest country, and among the most industrialized states of the developing world. Does this mean geographical lessons don’t apply to Mexico and its people? Hardly. But it indicates we need to add more layers of information.
First, Mexicans can read maps and thermometers. They know their country is in the tropics. Rather than staying in the tropics, the majority moved up their omnipresent mountains until they, literally, rose above the oppressive heat and humidity. Over half the Mexican population resides in a series of highland valleys and plateaus in the country’s midsection, with most living above 7000 feet. In doing so, Mexicans, at least in part, addressed some of their issues with agriculture and economies of scale and health. Other Latin American countries have followed similar paths, but none of them have proven as successful as Mexico.
Which brings us to the second layer of information: Mexico shares a 2000-mile-long border with the United States. There are plenty of historical chapters the two countries share that are, shall we say, less than cooperative. The United States defeated Mexico on the battlefield, and in the aftermath, drew the border to their own liking. As such, the United States owns the demographic and especially economic heft of the borderland. Still, the normal economic rules apply:
By imposing American security levels on the northern borderland’s bulk, northern Mexico has found itself somewhat freed of multiple “normal” stresses that plague borderlands in general (mountainous terrains specifically). And since Mexican labor is less expensive than American labor, the propensity for trade and economic integration among the two lobes of the borderland is amongst the strongest globally.
The American cities of San Diego, Los Angeles, Phoenix, Tucson, Albuquerque, El Paso, San Antonio, Austin, Corpus Christi, and Houston all sit less than 300 miles from the border – a border they are linked to by excellent infrastructure. The cities on the southern side of the borderland – the Mexican metro regions of Tijuana, Juarez, Hermosillo, Chihuahua, and Monterrey – might be culturally Mexican, but economically, they function as satellite cities of the United States.
And because Mexican-American relations have been stable and fruitful these past thirty years, those Mexican cities have painstakingly developed and increased their local educational standards to the American norm. This isn’t simply a relationship that simply works, it works well. Mexico figured out its geography, and northern Mexico in particular decided to get in-bed with its northern neighbor.
The third layer to Mexican success is more institutional: In the 1980s, Mexico was transitioning from single-party rule to democratic norms, a touchy, fraught process for any country – triply so for a country with as riven geography as Mexico has. Under George HW Bush and Bill Clinton’s leadership, both to expand the American economic footprints and provide Mexican democracy with a more stable footing, the United States negotiated a free trade deal with Mexico City (and invited the Canadians along for the ride). And so, NAFTA was born.
Access to American capital and consumer markets provided Mexico with the opportunity to shift away from a resource-export-driven system into something more value-added. The results are almost unprecedented. Most developing Latin American countries are relatively closed, with most export income coming from things like crude oil, coal, coffee, fish. In the early 1980s, Mexico was no different. But now, Mexico is the most trade intensive Latin American country by a factor of three, and over 80% of its exports are manufactured goods, with nearly all its products flowing north. Hiccups and exceptions abound, but Mexico has taken maximum advantage of the formation of North America’s trade space.
Fourth and finally, Mexico got lucky. This one takes a bit of exposition:
Normally, trucks are the dumbest way to move things from points A to B. Dragging stuff around via semi truck-towed container costs approximately twelve times more than floating them via container ship. Courtesy of the Mississippi, Missouri, Arkansas, Red, Tennessee, Ohio, Sacramento, Colombia, Alabama, Tombigbee, and Hudson Rivers (plus about five dozen of their smaller lesser-known brethren) the United States doesn’t just boast an internal, naturally navigable water-network larger than anyone else’s, but instead, a system larger than everyone else’s.
The United States’ rivers proved a key feature in empowering America’s breakneck growth to world power in the 19th century. Not to mention, the United States’ subsequent maritime acumen proved key to the Americans’ rapid and thorough defeat of the Mexicans in the Mexican-American War of 1846-1848. (Cliff-notes version: American forces baited the Mexican army into a multiweek march across Mexico’s northern deserts, while the Americans simply sailed the Marines to the Mexican port of Veracruz and marched directly onto Mexico City.)
Mexico lacks a single navigable river, and in moving the bulk of the Mexican population upmountain, most Mexican ports have become wildly underutilized relative to the size of the Mexican economy. In an industrialized and globalized world dominated by massed waterborne shipments, this is a kiss of death. All imports or exports must first deal with a mountain chain. Any goods part of an integrated multi-step manufacturing supply chain where goods come and go via Mexico’s ports would need to navigate such chains at least twice. One of the many reasons East Asia does so well in electronics manufacturing is because the bulk of East Asian cities are either on the Pacific Coast or, at worst, only separated from the coast by a relatively short stretch of (relatively) flat land. Mexico should not be able to play.
But it can, because the United States continues to do something monumentally stupid.
Back in 1920, the United States adopted the Jones Act (aka the Interstate Commerce Act) which among other things, forces any cargo being transported between any two American ports to use American built, owned, captained and crewed ships – a restriction the United States declined to place on any internal transport method. The result was a century of massive investment in rail and truck infrastructure that dramatically reduced the cost of internal overland shipments and an atrophying of the American waterway system.
The Americans deliberately muffled their sublime geography’s most glorious benefits.
Within a few years of Jones’ adoption, the Americans lost their coveted spot as having the world’s lowest internal transport costs. Today, instead of internal American shipments using waterways, Americans primarily use trucks to shuttle about over two-thirds of their internal commerce.
If the Americans utilized their waterways like other countries, Mexico simply couldn’t compete in the American market. But if the Americans insist on doing everything the hard way, and limiting themselves to trucks…well, on that field of competition, the Mexicans are in their element.
And it shows.
Mexico became America’s largest trade partner in 2019, a position they will not give up in our lifetimes. So to best understand what’s going on south of the border, as well as with American-Mexican economic and diplomatic relations, sign up for our videoconference on June 16 below.
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This piece is part of the Cutting Room Files, portions of the upcoming Disunited Nations text that were cut for length. Disunited Nations is available for pre-Order now on Amazon.com, Harper Collins, and IndieBound.
Canada is… not a normal place.
Everything from its settlement patterns to its defense strategy to its national politics to its economic structure is wildly different not just from the United States, but from every other country on the globe. Until now that has not had an overly negative impact upon Canadian-American relations, but times are changing (and from the Canadian point of view, not for the better). To really understand recent shifts, we need to start not in Canada, but in Mexico.
It comes down to demography.
Mexico has a more-or-less standard demographic profile. Lots of children, a good number of young workers, fewer mature workers and very few retirees. Chart it out, children on the bottom and retirees on the top, and courtesy of simple mortality you get a pyramid.
For purposes of the North American market, there are two big takeaways here. First, Mexico is hungry. All those young workers having lots of kids means the country is a never-ending festive parade of spending on education and food and diapers and homes and cars. Second, Mexico isn’t all that skilled. This is less an indictment of Mexico’s educational system, and simply that people below age 40 don’t have all that much experience in their chosen professions. It makes Mexico excel at relatively low-value-added manufacturing and assembly, but the Mexicans are forced to leave the high-value-added stuff and design to others.
For the Americans, this makes Mexico the perfect complement. Its people are ravenous for American exports, the Mexican work force meshes nicely America’s more high-value-added workers, and for the most part the two countries do not compete head-to head. No wonder that Trump’s rhetoric on Mexico has evolved so strongly over the course of the past two years from issues of trade to issues of identity and migration.
Simply put, from American point of view, the Mexican demography is the demography of the perfect partner.
Canada’s is not.
Canada’s population bulge isn’t among the young workers who complement the American economic structure, but instead among the mature-worker demographic who compete. A demographic bulge in the 40-65 bracket means Canada is super-saturated with high-skill workers. This extra supply depresses the cost of skilled labor within the Canadian system, which has a similar impact upon the price of the goods the country’s skilled labor force produces.
Even worse, the lack of 20- and 30-something Canadians means Canada cannot even consume its own production. It must dump that production on foreign markets, and proximity alone means that some 75% of it goes to the United States. Economically, Canada isn’t a partner. It is a competitor, and that’s before one considers the Canadian tendency to subsidize industries as unrelated as dairy and aerospace and timber and electricity.
In a time when the Americans are pulling back from the global system and rewriting all their trade relationships, this alone would be cause for great concern in the Great White North. But the Canadian-American economic mismatch is only the first problem.
The second problem in Canadian-American relations is the Americans are having a change of heart about their northern neighbor not simply in economic terms, but overall.
When the Trump administration started its whole the-world-is-screwing-us-and-we’re-going-to-forcibly-renegotiate-all-trade-deals campaign, the Canadians took it as an opportunity to make demands of the United States. That clearly didn’t fit with TeamTrump’s understanding of what was supposed to be going on. Why in the world would the Canadians believe they have leverage over the government who controls the only market that matters to Canada, and global finance, energy and sea lanes to boot?
Canada’s confidence dates back to the Cold War. The flight path for the feared Soviet nuclear missile strike on the United States would have been over Canada. There was no version of American security that would not by default also guarantee Canadian security. The Canadians could have been security free-riders if they had chosen to, but to their credit they have fought and died alongside American soldiers in nearly every overseas endeavor the U.S. military has undertaken.
That does not mean the Canadians did not use their leverage, they just used it on issues of trade rather than security, leveraging their strategic position to gain concessions on market access for their products. The Canadians had a strong hand and they played it well. Repeatedly. Those trade victories were all folded into the original NAFTA accord back in the early 1990s.
It all fit with the times. The whole concept of the American-led global Order was that the Americans would create and subsidize a security and trade rubric to induce countries to join them in the fight against the Soviets. Guns-for-butter was the rule of the era. Canada’s position meant it had more to offer, and granting Ottawa some extra trade concessions for its cooperation was a price the Americans were eager to pay.
Times change.
Canadian negotiators resisted the Trump administration’s trade goals, thinking Canada’s leverage still existed. But with the Cold War over, the Americans no longer fear Russian attack. Canada is now just another country. Once the Americans had finalized NAFTA2 with Mexico, they turned to Canada and issued a simple ultimatum:
Mexico’s market is growing. Yours is not. Your market is protected. Mexico’s is not. The Mexican labor force is complementary to ours. Yours is not. We have a deal with the country that matters, and that isn’t you. We are leaving NAFTA. You know our terms. Take them or leave them. We are moving on.
In a single searing moment of revelation, everything that had guaranteed Canada leverage over America, everything that granted Canada a place in the world, everything that had generated any meaningful international influence, had evaporated. Canada capitulated within days and signed on for NAFTA2.
All things considered, as emotionally crushing and economically damaging as a forced rejiggering of Canadian-American relations will be, it could be (a lot) worse. Canada is very close to the top of a very short list of countries that the Americans have positive feelings for. Will the Canadian ego and economy suffer under NAFTA2? You betcha. But Canada will still enjoy privileged, security-risk-free access to the American market. In a post-Order world precious few countries can claim the same. Canada may limp, but it will still be able to walk.
Unless the third issue completely overturns the Canadian system from the inside.
Again, Canada is not a normal place. Unlike the United States where the states and federal government exercise roughly equal amounts of power, in Canada the provinces are preeminent and often have the ability to block federal policies they do not like. The country didn’t even get its first comprehensive internal free trade agreement until 2017.
As such, the provinces of Canada function less like components of a common country, and more like a loose clutch of independent countries which compete – oftentimes furiously. That would be problematic enough if the provinces shared a common demographic base. That, they do not.
Quebec is as vitriolically Francophone as the Maritimes are Anglophone. A huge chunk of the population of Toronto is South Asian, while East Asians tend to be overrepresented in Vancouver. The Prairies are as white bread as America’s upper-Midwest. These splits at least partially explain the seemingly never-ending drama of Quebecois separatism, but it is the intersection of demography and economics where the real problems erupt:
The Maritimes’ economies crashed decades ago and its subsequent “recovery” has been anemic at best. Now those provinces have all aged into mass retirement making them de facto wards of the national government. Mighty Quebec is only a few years behind, and is making the transition to demographic basket case right now. Both British Colombia and Ontario are no more than five years behind Quebec. A big piece of the BC economy is serving as the gateway to Asia, and the Trump administration’s trade war is likely to enervate those links. Even worse, the NAFTA-integrated manufacturing and agriculture that makes Ontario and Quebec hum were sectors that specifically benefited from NAFTA1, and which now face far steeper competition from the United States and Mexico under NAFTA2. More specifically, Quebec’s aerospace company, Bombardier, is both one of the most heavily subsidized in the world and is linked into Airbus – a firm that is both the target of extensive American tariffs and one whose fate is locked up in the Brexit drama.
Functionally, that restricts economic dynamism to the demographically young provinces of Alberta and Saskatchewan, a pair of entities whose economies depend upon old-school oil and natural gas production. For years now, funds transfers from the pair – quintuply so from Alberta – to the center is what has enabled Canada to enjoy its much-lauded social welfare state.
That’s not the end of the story, but instead just the beginning.
Canada’s leader is one Justin Trudeau, a scion of a powerful family. Justin’s father, Pierre, was a force of nature. Love him or hate him, everyone acknowledged that Trudeau the Senior was a commensurate politician. Dude could work a room, and it isn’t much of a surprise that he served as Canada’s prime minister for 16 years.
Justin, in comparison, isn’t a particularly smooth operator. His rise to the prime minister’s chair five years ago largely occurred because of circumstance. Many Canadians had tired of a decade of conservative minority rule under the somewhat curmudgeonly Stephen Harper. A coalition of liberal players banded together around the Trudeau name and managed to carry an election.
In that environment, Trudeau the Younger fit the bill. He isn’t very bright, his French is on the weak side, his past work experience was at best mediocre, but he is young and so very very pretty. In a world of social media and an increasing split between modern liberal values and traditional economic sectors, that proved enough.
Under Justin Trudeau’s rule Canada has… gotten by. There have been no disasters, but few serious new policies. Really, Justin Trudeau’s administration has only shifted two things.
First, it has steadily centralized power in Ottawa, making it easier to drain cash from Alberta and Saskatchewan both to balance out the slipping economic performance of the rest of the country, and to push this or that pet policy. Second, the pet policy of the moment is a fairly aggressive environmental program that has proven popular with Justin Trudeau’s base. That program has put ever-more-stringent restrictions on the economies of Alberta and Saskatchewan – specifically on the sectors that make the Canadian national budget possible.
Justin Trudeau’s lackluster performance has cost him. His Liberal Party has been ejected from parliaments in Alberta, Saskatchewan, Ontario and some of the Maritimes in favor of the conservatives; in BC in favor of the left-leaning NDP and Greens; and in Quebec in favor of more nationalist sentiments who are furious with his capitulation to the Americans in NAFTA2.
Within the Liberals, the future isn’t all that bright either. Aside from the Trudeau name, the one characteristic that Justin inherited from his father is the charisma necessary to suck all the air out of the room. Justin is such a big presence that there is no next-generation of young leaders working their way up through the Liberal Party ranks. When Justin falls, so too will the party.
Fast forward to this week.
The Canadians voted in national elections October 21. Justin Trudeau’s Liberals were not exactly gutted, but they lost a lot of seats ending up with just 157, thirteen shy of what’s necessary to form a majority government. That will force the Liberals to rely upon support from the Greens (whose primary concerns are climate change policies) and the NDP (who are like a more math-challenged version of the Greens).
For Canada as a whole, this courts disaster.
Political sentiment in Alberta and Saskatchewan turned sharply anti-Green and anti-Trudeau years ago. The Albertans and Saskatchewanians assert the Greens, the NDP and the Trudeau government are actively conspiring to stymie any and all efforts to get Albertan and Saskatchewan energy exports to the wider world. The Greens and NDP openly say they do, with anti-Albertan policies in the one province they control – British Colombia – having reached the point that BC and Alberta have a hot little inter-provincial trade war going. The Trudeau government attempts to be at least a bit circumspect on the issue, but under Justin Trudeau’s rule construction has yet to begin on a single cross-province pipeline.
Legally, there is an excruciatingly painful route forward. Quebec’s on-again, off-again independence spasms firmly established that Canadian provinces have the right to leave Canada. Paths to secession have been approved – at least in theory – by both the Canadian parliament and the Canadian Supreme Court. We are approaching the witching hour.
There is no modern Canada without Albertan and Saskatchewan financial strength, and there is no Albertan and Saskatchewan financial strength without the two provinces’ energy sectors. Now, with the Liberals needing Green/NDP support to rule, the already-deep political split is taking on more ideological, more hostile overtones.
The vote breakdown is not encouraging. In Monday’s elections the Liberals lost every seat they previously held in both Alberta and Saskatchewan. In an echo of America’s 2016 presidential elections, the opposition Conservatives actually won the popular vote, but because of Canada’s equivalent of America’s electoral college they earned 25 fewer seats than the Liberals. Further mirroring America’s more recent political evolutions, Justin Trudeau claimed a “clear mandate” for stricter climate-change-related policies – an assertion positively Trumpian in its ability to creatively reinterpret the facts on the ground.
We are likely to see two things over the course of 2020.
First, the new federal political alignments are the absolute worst-case scenario for Alberta and Saskatchewan. They have already tried and failed – horribly – to renegotiate their financial relationship with Ottawa, and now they can look forward to ever harsher restrictions on their economic capacity paired with ever more robust siphoning of their wealth to the Canadian center. The formal, open, public debate on secession begins now.
Second, the Americans are likely to take both notice and action.
In the War of 1812 Canadian colonials burned down the American capital. In the war’s aftermath, realizing the Americans would be jonesing for revenge, the Canadians carried out what has arguably been the most successful rebranding effort in history, from trigger-happy arsonists to polite, cuddly socialists.
That effort enabled Canada to avoid American wrath. Later, Canada maintained a bit of protection due to its status as part of the British Empire. In the interwar period the U.S. had bigger fish to fry at home, what with the Great Depression and all. Post-World War II the Americans’ need to maintain the global Order meant that Canada, for all its inconsistencies, was under American protection – which included protection from America.
The Canadian system is splitting along provincial, economic, demographic and ideological lines, and there is no one in the Trump administration who likes Justin Trudeau personally, ideologically or politically. Add in a now-unrestrained America, an America who sees Canada as a competitor, an America who sees the Canadian government as a mix of annoying and ungrateful and self-righteous, and a complete role-reversal is fully in play. Unless the Canadians can get their shit together, it will be eeeeeeasy for Washington to start cutting deals with individual Canadian provinces to hammer preexisting wedges ever-deeper into the Canadian system.
Alberta has the means and motive to destroy Canada. Washington has the means and motive to destroy Canada. And the likely format of the new Trudeau government is providing the opportunity.
This piece is part of the Cutting Room Files, portions of the upcoming Disunited Nations text that were cut for length. Disunited Nations is available for pre-Order now on Amazon.com, Harper Collins, and IndieBound.
American-Mexican relations have been…colorful of late. American President Donald Trump has threatened Mexico with a rising tariff system that would constitute the greatest tariff effort in dollar terms by Americans in their history. Mexican President Andres Manuel Lopez Obrador (AMLO) is pushing a change to tax law that would more or less treat businesspeople like money launderers which would throw trade relations into the freezer. Threats and counterthreats on migration and trade and law enforcement and energy and water rights have ratcheted up to near-crisis levels.
This is actually… really good. Ever since Mexican independence in the early 19th century, American-Mexican relations have oscillated between cold-shoulders and American invasions. Today, really for the first time in both countries’ histories, the Americans and Mexicans are not talking past one another, but instead speaking with each other. The process is loud and messy, yes, but it is actually a conversation. The United States and Mexico are working out deals, making functional compromises, and finding common ground. What’s been happening the past two years are the sorts of interactions one would expect between two countries who find themselves increasingly intermingled both economically and demographically. We all fight most vociferously with our families.
That hardly means it is all well thought out. One of the most frustrating things about working in the geopolitical forecasting space is that sometimes luck plays a role, and that has most certainly been the case of late.
Consider the individuals helming both countries.
In the United States, Donald Trump rose to power on a wave unapologetic nativism, which expressly included a harsh campaign against Mexico on economic, political, security and racist grounds. On the other side of the border is AMLO, a guy who combined Trump’s disdain of foreigners, Elizabeth Warren’s enthusiasm for dressing down corporate interests, Ted Cruz’s penchant for blind obedience to ideological dogma, a Clinton-esque love-affair with political corruption, and Bernie Sanders’ pathological refusal to engage in basic mathematics. It’s difficult to imagine a set-up that would be less constructive to functional bilateral relations.
And yet, here we are, with the Americans and Mexicans enjoying the most positive bilateral relationship ever.
The unexpected outcome largely has to do with an olive branch from AMLO. After his election in mid-2018, but before his inauguration in late-2018, AMLO apparently had an epiphany. He realized that if he and Trump engaged in a binational pissing contest over who was more populist, the bad blood would consume his entire presidency. As he had put together a laundry list of tasks to remake Mexico in his own image, that simply would not do. So he reached out to both his predecessor and Trump, and indicated that if they could complete the renegotiation of NAFTA2 before he took office, he would not seek to reopen talks and would ensure the new deal would be ratified in a timely manner.
AMLO has since proven to be a man of his word. Mexican ratification occurred on June 19 of this year.
While there are obviously portions of NAFTA2 the Mexicans are less than enthused about and the new deal will disrupt a great many industrial patterns across the length and breadth of Mexico, for the most part the new deal is as much a win for Mexico as it is for the United States.
Among the Trump administration’s biggest goals in the NAFTA renegotiations was to make sure goods that benefitted from the low tariffs of the NAFTA system were mostly produced inside of it. These “rules of origin” quotas were increased and ensure that a certain percentage of the product’s value was produced within Mexico, Canada, and the United States rather than outside of it. As Mexican manufacturing capacity is both less expensive and more efficient than most manufacturing in both China and Canada, Mexico will certainly pick up a disproportionate share of whatever relocates to the North American market. Add in the general breakdown of the global Order, and Mexico’s now-even-more-privileged access to the American market, and Mexico’s economic future looks brighter and brighter.
Merchandise trade is only one of several aspects of a tightening, more constructive, relationship between the two North American powers.
One of the many aspects of America’s shale revolution is an accidental, incidental oversupply of natural gas prices in the U.S. market. American natural gas prices are now the lowest (unsubsidized) in the world, and a dozen major pipeline networks have been laid down to connect that supply to Mexican demand. All the pipes are now completed and soon about half of the electricity consumed in Mexico will be sourced from American natural gas.
One of AMLO’s less-functional plans is an overhaul of Mexico’s state energy monopoly Pemex, a company so badly run and a process so ill-conceived that it would probably be better for Mexico to burn the entire company to the ground, shoot everyone involved, and start over from scratch. The more dysfunctional Pemex is, the less able Pemex will be able to meet Mexico’s growing energy needs… and so the more reliable a customer Mexico is for American energy product exports.
Mexico has rapidly developed since the implementation of the first NAFTA accords back in the early 1990s. That has shifted millions of Mexicans off subsistence farms and into urban environments, even as the standard of living of the average Mexican has surged. Less agricultural production plus more disposable income makes Mexico a premier destination for American agricultural products. In particular, when Mexicans get a bit of extra scratch, the first food product they reach for is beef – American beef.
Higher living standards within Mexico have gutted immigration from Mexico to the United States – it has been negative for ten straight years. That gives both countries a vested political interest in regulating Central American migration through Mexico to the United States. One of the dirty secrets of the immigration debate in North America is that Mexicans are even more opposed to Central American migration than Americans. Trump has provided the Mexicans with the perfect excuse to crack down on the through-migration, while enabling the Mexican government to rack up a public relations win.
While Mexican migration to the United States peaked years ago, past migration has made Americans of Mexican extraction the second-largest minority in the United States. Even if the economic mingling were not occurring – and it has already surpassed that of any other American co-mingling in history – the demographic co-mingling easily puts Mexican cultural influences in third place behind German and British culture.
Taken together, Mexico is now America’s second-largest partner in energy, trade, agriculture and security, and is on the cusp of taking the top spot in all categories.
So… that’s the good news.
Understanding the bad news requires a bit of a step back.
Roughly a decade ago Mexican and American authorities were tracking hundreds of small groups involved in moving cocaine and marijuana through Mexico to America’s southern border. Just as mountainous regions help fracture regions among several competing countries, Mexico’s mountainous geography meant no single drug trafficking organization (DTO) could command all that much territory. A small DTO might control a single stretch of highway, or a single city or a local shake-down racket. Violence between these groups and Mexican law enforcement was horrific, but that carnage was nothing compared the violence among the various drug trafficking groups as they battled to expand their role in the drug trade or defend their patches from one another. In that environment, Mexico’s murder rate soared.
But even then, not all DTOs were created equal because not all DTO leaders were created equal. Today’s story involves a 5’ 6” dude by the name of Joaquín Guzmán, aka El Chapo (which roughly translates as “shorty”), who ran his drug group less like the Sopranos or a street gang, and more like a Korean chaebol.
Under his hand, the Sinaloa alliance focused on three general themes:
First, the bread and butter of drug smuggling to the United States. Violence within the alliance was snuffed out, while the sort of petty violence – assaults, rapes and robberies – that characterized other DTOs was frowned upon. Regular Mexican citizens living in Sinaloa territory were not terrorized by the cartel, so they tended to not resist its efforts.
Second, experimentation with new business lines that would enable the Sinaloa to deepen and expand its business. Cocaine never went out of fashion, but the cartel also commercialized heroin and methamphetamines. Selling counterfeit pills to profit from Americans’ opiate addition was an easy add. Cash-heavy businesses found favor as a means of assisting in the drug-money-laundering effort: limes, beef, avocados, real estate, tourism. More business lines mean more and more stable profits.
Third, oblique cooperation with the Mexican government to help weaken the competition. Officially, the Sinaloa would provide the Mexican government with scads of intel on their competitors’ operations. Unofficially, the Mexican government would turn a blind eye to the Sinaloa’s operations because Mexico City could only prosecute raids on so many targets at a time. The Gulf and Zeta cartels tended to suffer the most from this de facto alliance.
El Chapo’s strategies were so successful the Sinaloa grew to become the most powerful organized crime group not simply in Mexico, but the world. As the Sinaloa alliance expanded and deepened, violence among its constituent components plummeted. After all, they were all on the same side, and El Chapo did not tolerate infighting. Mexico’s murder rate fell.
But nothing happens in a vacuum. Sinaloa’s success meant it also became the most powerful organized crime group in the United States, which earned El Chapo a spot at the top of the Obama administration’s most-wanted list. A joint American-Mexican effort resulted in his arrest in 2014. El Chapo promptly escaped… and was re-arrested in 2015. Mexico extradited him to the United States in 2017, where following his conviction on… lots of charges he is now serving multiple life sentences in an American prison.
Without the business-minded El Chapo to ride herd on the Sinaloa alliance, the relative peace of the Sinaloa era quickly collapsed as the DTO’s various factions fought for control. The biggest and baddest of those factions is known as the Jalisco Cartel Nuevo Generacion, a group run by the Sinaloa’s former enforcers. Whereas the Sinaloa expanded by collaboration and diversification, the Jalisco expands by brute violence.
Four things come from this.
First, the Jalisco is not the Sinaloa v2.0. The Jalisco’s leader – Nemesio Oseguera Cervantes aka El Mencho – first instinct is to kill everyone in every room he enters. He absolutely lacks El Chapo’s charisma and management skills. The Jalisco is expanding, particularly in challenging its former patron, the Sinaloa, but it is most certainly not on course to dominate the drug trade.
Second, between the Sinaloa’s fall and the Jalisco’s rise, Mexico’s murder rate is once against setting record after record. El Mencho has also – repeatedly – broken the cartels’ unwritten rule that one does not engage in open violence in tourist areas.
Third, the Sinaloa is not dead and still supplies the majority of drugs that enter the United States. After a year of chaos and breakdown, elements of El Chapo’s family – most notably his sons – have seized control over what was left of the alliance and thrown up substantial roadblocks to El Mencho’s bloody expansion. Los Chapitos may not be the leaders their father was, but they have proven far from incompetent.
To give an idea of just how potent the Sinaloa remains, consider the events of last week. A government raid October 17 on a suspected sniper in the city of Culiacán accidentally captured one of los Chapitos. Shocked by their unexpected haul, the government stammered a bit. Shocked by the loss of one of their own, the entire Sinaloa alliance descended upon the city in a tsunami of carnage, forcing the unprepared government to release El Chapo’s son. In northwest Mexico, the Sinaloa remains the de facto government. The old man would undoubtedly be proud.
Which brings us to the fourth and arguably most important outcome. El Chapo’s business diversification efforts combined with the breakdown in the “peaceful” nature of the Sinaloa’s management strategy combined with the rapidly deepening economic integration between the American and Mexican markets means that the cartels are now becoming part of the North American economic picture and they are bringing their violence levels with them.
At present this expansion has not penetrated manufacturing – that’s an industry that’s simply too high value-add and too finance-heavy for easy links with DTOs. But nearly everything else is game: transport, trucking, energy, agriculture, construction, tourism, real estate. All these sectors and more now have DTO threads woven throughout, particularly in the Sinaloa heartland of northwest Mexico. And it doesn’t take a big leap to link these Mexican sectors with their American peers. First landfall of Mexican DTOs in these veins will be U.S. regions just across the border from Sinaloa strongholds: Tucson, Phoenix, El Paso, San Diego, Los Angeles and the California Central Valley.
It is worth remembering that while the collapse of the global Order has consequences for everyone, and in many cases those consequences will be the determining factor in a country’s future, regional and local factors don’t simple fade away. Countries’ local geographies and local economic trends and local histories remain relevant. Global shifts are likely to favor Mexico more than any other country, but it can still get tripped up on issues closer to home.
With a very strong showing Andrés Manuel López Obrador won Mexico’s presidential elections July 1. The best description of López Obrador would be to combine the worst traits of Donald Trump, Hillary Clinton, Bernie Sanders, Elizabeth Warren, Ted Cruz, Jeremy Corbin, Vladimir Putin and Kim Kardashian. But perhaps without their impeccable manners.
Sorry folks, I don’t have a lot of guidance on this one. There are too many unknowns, with the biggest one being López Obrador himself. While he has been part of the Mexican political landscape for decades, this will be his first real position in national politics. He could be like another nationalist-populist – Brazil’s Luiz Inácio Lula da Silva – who dialed back the rhetoric shortly after his election, and whose policies never went as far into the wilderness as many feared during the campaign. Or he could be like Trump and the rhetoric is real. We just don’t know. And we won’t know for a bit yet. Mexico has the longest lame-duck political window in the world. López Obrador won’t actually take the reins until December.
But I can issue a few words of warning:
Both Mexico and the United States now have nationalist, populist, inexperienced leaders who believe current political alignments within their own countries as well as the broader geopolitical context are designed to cheat their people. Both regularly make political hay by demonizing those on the other side of the border.
With the entire global Order breaking down, and me – repeatedly – noting that the U.S. will not simply emerge broadly ok, but will be able to dictate the shape of the future, it is tempting to say the same will be the case with degraded American-Mexican relations. But this isn’t like American-French relations where the bickering is good fun. This really matters.
Spanish is America’s second-most common language; English is in the second slot in Mexico. Family connections across the border are the most robust in the hemisphere. Based on how you run the numbers, Mexico is either America’s top or second-largest economic relationship – a position that will hold regardless of what happens with the global Order or NAFTA. This economic relationship isn’t simply trade – this is integrated supply chains with products crossing the border multiple times. Retooling to adjust could be done, but it would take at least three years. Most important, Mexico borders the United States. Trouble in bilateral relations are not a world away, but right next door.
NAFTA may have its faults, but its economic success in Mexico has made net Mexican migration to the U.S. negative for a decade because it gives Mexicans jobs. Smash the agreements that employ Mexicans, and two results among many will be vast increases in drug flows and illegal migration as Mexicans find it harder to find a 9-to-5. A wall would only encourage such behavior.
Hostility between the United States and Mexico impacts immigration, trade, financial stability, supply chains, manufacturing attractiveness, wealth levels, drug policy, water rights, agricultural markets, the works. If there is one country the Americans need to have a productive relationship with, it is Mexico. Texas is particularly vulnerable to everything that could potentially go wrong.
I’ve no doubt that the United States – under any president – can “handle” Mexico. But Mexico isn’t Paraguay. Mexico has 130 million people and is a $1 trillion economy. Whatever shape this and future administrations beat relations into will take time and effort. Time and effort that would be better spent on locations where partnership is not the best (and easiest) option.
Yet, unfortunately, for now all we can do is wait and watch. Both Trump and López Obrador are famous for their unwillingness to take advice from anyone. And for the next five months López Obrador has a lot of free time on his hands to play on Twitter with his American counterpart.
I’m going to do something today that I normally try to avoid: commenting on a political statement that may well not turn into policy. It’s a big, busy world with a lot going on on even a slow day, and American President Donald Trump likes to talk and tweet a lot. If I philosophically waxed on the potential geopolitical implications of everything Trump ever said (or was said about him or near him), I’d never have time to shower.
Yet of late Trump has been connecting more of his rhetoric to actual policy (for example, on trade), and his ongoing cabinet overhaul is installing personalities with reputations for boldness and effectiveness (for example, the incoming National Security Adviser John Bolton). Me noting such improvements in delivery is not the same thing as me personally endorsing those policies or persons, but I’m in the job of calling it as I see it and I avoid lobbying for any particular policy.
Which means I’m about to do something else I normally try to avoid: calling a mistake a mistake.
At a gathering of Baltic presidents earlier this week the American president indicated he planned to deploy the U.S. military to the border until such time as Congress appropriates the required funding for a large, meaningful border barrier. On April 4, the Homeland Security Secretary indicated that the Trump White House was already coordinating with several states to send National Guard troops to the border, perhaps immediately.
I’ll leave it to more military-minded folks to parse the differences in significance between a regular military deployment and the Guard, but regardless, from my point of view it would be a colossal mistake on at least two levels.
First, far from reducing illegal migration, any meaningful wall effort will drastically increasethe ability of illegal migrants to cross the border while also criminalizing the entire border region. The Sonoran and Chihuahuan Deserts that form the bulk of the American-Mexican border regions are among the most dangerous, desolate regions of the planet. That makes it a good border – it is hard to cross. Would-be migrants have to make crossings in the deep desert. Dangerous, desolate areas with no towns also have another defining characteristic: no roads. Anyone who crosses the deep desert largely has to do so on foot, and a great many die trying.
Areas with no roads cannot support other signs of civilization: post offices, schools, hospitals, gas stations…or walls. The first thing that would need to be done to facilitate the construction of a meaningful border wall would be to build service roads across the desert at at least 40 points in order to enable heavy construction vehicles to reach the border in the first place. At least one road would then need to parallel the wall across the entire 2000 miles of would-be border wall. Put simply, the preparatory effort of building a barrier to stop illegal migrants would eliminate the biggest current barriers that hinder illegal migrants: the region’s natural hostility, remoteness and lack of infrastructure.
(Incidentally, narcotics also flow more heavily along routes with good infrastructure, so the wall would likely double down on one of America’s most pressing social/law & order issues in addition to exacerbating the migration question.)
Even that assumes the wall actually stops migrants. It wouldn’t. A great comparison is the world’s second-most hermetically sealed border barrier: the Gaza Wall that keeps the Palestinians bottled up in the Gaza Strip. (The Korean DMZ, with its miles-thick fields of landmines, comes in first.) The Gaza Wall is over 30 feet high, made of solid concrete, and the Israeli Army has standing shoot-on-sight orders for anyone brave enough to try overtopping it. Yet the Gaza Wall is so riddled with tunnels that the Gazans regularly get everything from construction materials to consumer electronics to foodstuffs to live animals to missiles to wedding parties to fast food deliveries on a daily basis.
The point isn’t just that the Gaza Wall is porous, but that Gaza’s under-wall traffic is fairly regular – items and people go back and forth often. A U.S.-Mexico border wall would need to block irregular traffic because the illegal migrants only need to cross once. That requires a much more intense security regimen than exists in Gaza, which now means so expanding the border infrastructure that the United States has a moderate number of border agents every few miles. Having only 30 people on station every four miles (a woefully inadequate number considering the task’s scale) at any given time adds up to roughly 60,000 security staff – not counting support personnel or the sort of expanded infrastructure required to support such a large number of people along such a long logistical chain in such a remote area.
It’s worse than it sounds by far. Any border defined by an ineffective barrier and large, determined population movements is one in which various elements will conspire to provide clandestine crossing capacity that expressly avoids law enforcement. That not only generates a culture of criminality, but a whole industry based upon circumventing the barrier. Considering the Mexican cartels already have deep pockets courtesy of their narcotics smuggling, and already hold respectable market share in the smuggling of people, adding a wall would provide the cartels with the perfect environment to use cash and guns to criminalize America’s border towns and the border force itself.
My second major objection is that border patrol is the last thing the U.S. military should be involved in. Militaries exist to fight wars, and while the nature of conflict is certainly evolving in an era of irregular conflicts, drones and cyberspace, hunting down illegal migrants remains completely alien to the military’s training and culture. America’s military is awesomely powerful because its Abrams tanks and Nimitz carriers and Longbow helicopters are terrifyingly effective at blowing shit up. In a high labor cost country like the United States, a military’s business is all about using very expensive equipment to blow up other folks’ expensive equipment, preferably from over-the-horizon so that retaliation is never an option.
Interdicting illegal migrants requires not just getting up close and personal, but capturingthe would-be migrants, shipping them somewhere for processing, and then somehow dumping them back across the border… and likely doing it all over again the next day. I have the utmost respect for the American military’s ability to adapt and evolve, but border duty means taking a high-dollar, high-skill asset and using it for low-dollar, low-skill tasks.
Even that assumes the military could do the job well. It could not. If there is something the military has learned after 15 years of wars in Afghanistan and Iraq, it is that it hates interfacing with civilians. The military is trained to, in a nutshell, kill people – not build things. But even during the Iraqi occupation lethality was a useful tool because there was an insurgency afoot, packed with imported radicals. That would not happen on the border. Lethality isn’t useful unless American society takes a hideously dark path and simply shoots everyone in the border region with a tan. Or if you prefer, the Army could separate the illegals from the citizens first and, what? Execute the illegals by firing squad? Any military that does either of those things becomes a force that American citizens would (and should) be afraid of.
Even that assumes meaningful patrols are possible. Were the U.S. Army assigned to this task it would be taking on the greatest geographic reach of any American Army effort everin the most hostile natural environment the Army has ever been deployed in on a mission for which “victory” would never be possible because the border isn’t a war.
There are other reasons barricades and troops are not the right solutions. A meaningful wall’s impact on trade would easily trigger a U.S. recession across the United States with Texas getting hit the hardest. It would cause a multi-year depression in Mexico that would so destabilize the country economically as to guarantee sustained increases of illegal migrants to the United States. Current thoughts of militarizing and attempting to secure Mexico’s northern border would actually cause the problems they purport to address.
It would also cheese off the government that is most critical to actually stemming migrant levels in the first place: Mexico. Keep in mind that net migration from Mexico to the United States has been negative for nearly a decade. Most of the illegals that enter the United States from the south are not from Mexico, but instead from the half dozen Central American countries. If interdiction is the goal, the best place to do so is at Mexico’s southern border which is both far shorter and easier to fortify than its northern border.
That sort of interdiction requires a relationship between Washington and Mexico City characterized by communication, cooperation and a degree of trust – not sending the Army to the border. Instead, the bilateral political relationship is now so poisoned that it will very likely lead to the election of the Mexican equivalent of Bernie Sanders – one Andres Manuel López Obrador – who has campaigned on a promise to cease all cooperation with the Americans.
Urban violence has been a stable feature of the news and politics mash-up of the past year or so. Whether it’s the murder rate in Chicago, or the threat of immigrants and the call for a southern border wall, or the civilizational threat of Antifa, it seems like there’s a lot out there to be spooked about.
Which makes it kind of odd that we’ve heard so little about Mexican drug violence as of late. The issue would play into hard right talking points regarding immigration, law enforcement, and The Wall™.
But, while there is certainly a lot of violence throughout Mexico still, things have quieted. The decline in violence since its peak in 2011 has been substantial and real – but it is not lasting. Violence is already very much on the rise again and Mexico is on the verge of a much more violent chapter in its drug war.
The story of these fluctuations in violence can all be told through the evolution of the Sinaloa cartel, by far the most active drug trafficking organization (DTO) in terms of smuggling and transporting activities within the United States. The cartel owes it success to a few key pillars:
Geography: Sinaloa has control over the Golden Triangle, a region in northwestern Mexico between the cities of Chihuahua to the north, Sinaloa on the Pacific coast, and Durango near central Mexico. The golden triangle is one of the few places in Mexico with a climate conducive to growing drug crops on a large scale. While that would be important income stream regardless, the real benefit is that all Mexico’s other DTOs are largely dependent upon transiting drugs from South America. Should something interrupt those supply chains, only the Sinaloa maintains independent sourcing. Meanwhile, the Sinaloa’s position on the coast also gives Sinaloa access to imported chemicals and other ingredients in producing synthetic drugs, which have become extremely important to cartel profits in recent years. In fact, the Sinaloa is in many ways a pioneer in pushing synthetics into the U.S. market.
Timing: The United States has been surprisingly successful lately in its anti-drug programs. Large-scale, domestic production of meth has all been shut down since a 2005 initiative against precursors. Marijuana began a path to legalization that has shifted a lot of production to the United States and out of the hands of cartels. Legal opioids were attacked head on, shutting down pill-mills and placing heavy restrictions on prescriptions. But this success has been ironically self-defeating. The Sinaloa was quick to take up meth production to fill the gap of lost U.S. production. And while legalization of marijuana certainly hurt the cartels, cutting into the profits of some DTOs by nearly half, it only drove Sinaloa to refocus its energies on local production of heroin.
Opioids: As a result, cheap heroin has flooded the markets to win back market share even as people in need of pain relief (or a fix) are willing to go to extreme measures to get now-less plentiful opioids. Complicating the picture, the Sinaloa has pioneered putting their heroin and synthetics into pill form and marketing it as counterfeit opioids, earning them a big new market across Middle America. Such heroin/opioid pills are a big reason why U.S. overdose deaths have tripled in recent years.
Structure and Tactics: The Mexican government began its crackdown on cartels in earnest in the mid-2000s and it has been broadly successful in carrying out a kingpin strategy. But as other cartels found their leaders picked off and their cartels fractured, the Sinaloa Cartel was able to continue uninterrupted due to its cellular structure and strategic use of intelligence. The head of the Sinaloa Cartel, known as El Chapo, was no street corner dealer. He excelled at managing the various factions within his cartel, encouraging them to experiment with new drugs (fentanyl) and new delivery mechanisms (heroin in “opioid” pill form), while discouraging them from engaging in petty crime – better to keep the Mexican government and Mexican population agnostic about Sinaloa activities. He was not afraid to play government forces off his rivals, supplying the government with both strategic and tactical intelligence on the other DTOs. And then there is simple mechanics: Mexico’s DTOs have proven so numerous and tenacious that Mexico City couldn’t possibly fight them all simultaneously. Why fight the Sinaloa if the Sinaloa is making it easier to fight the rest?
Border connections: By 2008, the Sinaloa Cartel was one of the most important DTOs in Mexico, but they didn’t directly control any of the border plazas. Plazas are not the quant city squares you might be thinking of, but key drug trafficking marketplaces or smuggling points. So the Sinaloa embarked on a campaign against the smaller but still powerful cartels who controlled the plazas of interest along the Northern border, most notably the Tijuana and Juarez cartels. What proceeded was the most violent chapter of the drug war to date as the Sinaloa literally fought in the streets to forcibly assimilate these cartels. It was during this Sinaloa consolidation effort that the city Juarez became the most violent city in the world.
And then, suddenly, the violent murder rate fell just as quickly as it rose.
As the other cartels faced inner-turmoil and a quickly changing market up north, El Chapo’s Sinaloa Cartel thrived and expanded as he gained a reputation for cutting down his allies. By 2014, Sinaloa was the major wholesaler in most American cities and Mexico had come under what came to be known as Pax-Sinaloa over a huge swath of Mexican territory. It wasn’t exactly rainbows and unicorns, but compared to the incredible violence of 2011 and 2012, Mexico was at peace. Juarez became safer than many large U.S. cities because the drugs could now flow without hinderance through the territory of a single (huge) cartel.
And this is the key point: the violence stops when someone wins.
The U.S.-Mexican Border
But that victory was short lived. Success in the plazas meant the Sinaloa could easily expand north of the border. By 2015 the Sinaloa was not just the top DTO in the world, but also the top organized crime group in the United States. El Chapo and the Sinaloa quickly became priority number one in the U.S. as opioid deaths rose to epidemic levels. El Chapo still had significant protection in Mexico, but he underestimated American interest in his removal. By 2016 El Chapo had been arrested (and escaped and re-arrested) and extradited to the United States. Bereft their leader’s sophisticated management, the Sinaloa immediately started to break down.
Which brings us to today. As the Sinaloa slides into internecine warfare, other cartels seek pieces of the Sinaloa’s empire; violence is again on the rise. The most important of these was a one-time partner of the Sinaloa known as the Jalisco New Generation Cartel. Based in the southwest, the Jalisco also has important geographic advantages, primarily in their control of the two most important Pacific ports as well as the synthetic drug capital of Mexico, Guadalajara. Their leader – El Mencho – lacks El Chapo’s diplomatic and personal touches. Instead he is more paramilitarily-minded, and more than willing and able to bring heavy equipment and advanced tactics to intimidate and/or eradicate his foes. He has formed alliances with several of the groups that El Chapo once sought to cut down and is continuing to take advantage of shifts in the American drug market. The Jalisco is far more violent than the Sinaloa ever was… and the Sinaloa were f’ing brutal.
The Jalisco started by taking advantage of the collapse of the Gulf Cartel in Mexico’s east, exacerbating the violence between the Gulf’s remnants and that of the Gulf’s former enforcers, the Zetas. Of late the Jalisco has barged into core Sinaloa territory, taking them on throughout the Baja Peninsula (ergo the Cabo violence) and especially the Tijuana border plaza. They are just now starting in on Chihuahua and the Juarez plaza. And within a year – unless the incredibly reclusive El Mencho falls to the kingpin strategy – the Jalisco will likely be in Nuevo Laredo as well.
That would put all the meaningful plazas in the hands of a single group that is arguably the most violent and organized major cartel yet. Even in the unlikely event that the violence does not spill over into the American side of the border, it will be very visible to Americans at a time when American-Mexican relations are already at a generational low.
Just in time for the NAFTA renegotiations to reach a critical point…
