U.S. Treasury Secretary Janet Yellen is set to embark on a trip to Mexico City from December 5th to 7th, with a focus on enhancing collaboration with Mexican officials to combat illicit finance and the trafficking of fentanyl. Additionally, the visit aims to reinforce Mexico's role in U.S. supply chains, as stated by Treasury officials.
During her visit, Secretary Yellen will engage in meetings with Mexican President Andres Manuel Lopez Obrador, the country's central bank governor, and the finance minister, among other key stakeholders, according to a statement released by the Treasury.
This trip follows the recent announcement of a counter-fentanyl "strike force" by the Treasury, which will bring together various departmental resources, including the Office of Terrorism and Financial Intelligence and the Internal Revenue Service's Criminal Investigation unit. The mission of this task force is to disrupt illicit drug trafficking activities.
Notably, President Joe Biden and Chinese President Xi Jinping agreed last month to deepen cooperation in curbing the flow of fentanyl precursor chemicals from China. These chemicals are often mixed by Mexican drug gangs before being distributed in the United States. Illicit fentanyl and other synthetic opioids contribute to tens of thousands of overdose deaths annually.
The Treasury has been actively imposing sanctions in recent months to target the logistics of fentanyl in Mexico. Secretary Yellen stated, "Treasury will use every tool at its disposal to disrupt the ability of drug traffickers to peddle this poison in our country."
However, challenges persist in curbing the overall cross-border drug trade, estimated at $20 billion to $30 billion a year. While sanctions have disrupted individual cartels, they have not entirely halted the flow of funds to these criminal organizations, as per Earl Anthony Wayne, a former U.S. ambassador to Mexico.
Secretary Yellen's discussions with Mexican counterparts and financial institution leaders will aim to intensify efforts against illicit drug finance. This includes better coordination of investigations to address drug supply chains disguised as legitimate commercial trade and to sever their access to financing. In the past two years, the Treasury has imposed sanctions on more than 250 entities linked to drug trafficking.
Moreover, Secretary Yellen will promote Mexico's role as a premier destination for the "friend-shoring" of U.S. supply chains, bolstering their resilience and advancing U.S. national security interests. Mexico has emerged as the largest U.S. trading partner this year, surpassing China, with continued growth in investment.
Among the topics for discussion are U.S. tax credits for electric vehicles produced in North America and new Treasury regulations that limit the amount of Chinese-controlled content allowed, potentially affecting Chinese investment in Mexico.
The visit underscores the importance of cooperation between the United States and Mexico in addressing critical issues related to both national security and trade.