Mariachis Are Playing Country Music

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM).

In the span of a few days, Mexico’s Senate authorized U.S. Navy special forces to train on its soil while Washington quietly tightened the screws ahead of the 2026 USMCA review. On paper, these are separate developments. In reality, they are chapters of the same story: a hemisphere reorganizing under pressure. Security cooperation is no longer symbolic, and trade agreements are no longer stable frameworks—they are leverage. From naval drills in Mexican territory to the looming threat of a “zombie” USMCA, this edition tracks the geoeconomic and military recalibration reshaping North America’s future.

In this issue, you will find:

• U.S. Special Forces in Mexico

• Latin America Could Help the U.S. With Its Chinese Dependency

• USMCA Uncertainty: North America’s Geoeconomic Shift

As always, please feel free to share GCaM with your friends and colleagues.

If you’ve been forwarded this newsletter, you may click here to subscribe.

Sheinbaum is kissing Trump’s ring, one step at a time, complying with the president’s high demands on the war against drug cartels.

Extra, extra. The Senate of Mexico has approved the temporary entry of 19 U.S. Navy SEALs into Mexican territory for a joint training exercise with the Mexican Navy, specifically aimed at enhancing special operations capabilities. The authorization passed with 105 votes in favor and one abstention and covers activity from February 15 to April 16, 2026 in Campeche, including San Luis Carpizo and Ciudad del Carmen.  

• The exercise, officially labeled “Improving Special Operation Forces Capacities” in Spanish, focuses on strengthening tactical and interoperability skills between elite units of both countries.

• President Claudia Sheinbaum requested the authorization, and lawmakers largely framed it as a strategic cooperation measure rather than an infringement on national sovereignty.

• Mexican officials have emphasized that such training is conducted within the framework of bilateral agreements and under Mexican legislative oversight.

Why it matters. This approval comes at a sensitive moment in U.S.–Mexico relations, following heightened U.S. military activity in the region and broader debate over security cooperation against organized crime. While the exercise is officially training-oriented, it signals a closer practical security alignment at a time when Mexico is under pressure to cooperate on regional threats and law enforcement priorities.  

• Only months ago, Sheinbaum was emphatic: Mexican sovereignty was non-negotiable. U.S. military operations on Mexican soil were a red line. Today, U.S. special forces are entering the country with congressional approval.

Between the lines. This shift follows a sequence of escalating signals from the Trump administration. First came tariff threats tied to security cooperation. Then came explicit warnings about cartel designations as terrorist organizations, legitimizing U.S. military intervention abroad. Then came the precedent: the removal of Nicolás Maduro and direct U.S. intervention in Venezuela under the justification of hemispheric security. The message to the region was unmistakable. The Western Hemisphere is an active security perimeter.

• Since then, Sheinbaum’s government has moved methodically. It extradited 37 high-profile cartel members to the United States in January alone, adding to a growing list of handovers.

• It also halted oil exports to Cuba after Trump publicly declared that “there will be no more oil or money going to Cuba.” And now, it has opened the door to U.S. special forces training inside Mexican territory.

• Individually, each decision can be framed as sovereign cooperation, but collectively, they look like strategic alignment.

Donroe Doctrine. Trump’s emerging hemispheric strategy resembles a modernized Monroe Doctrine. The National Security Strategy 2025 goes as far as to call it the Trump Corollary to the Monroe Doctrine. The premise is simple: the U.S. will tolerate isolationism globally, but not insecurity in its own hemisphere. Transnational criminal organizations are treated as terrorist threats. States that fail to contain them risk being treated as facilitators.

• Under that framework, Mexico is the closest battlefield to the White House.

• Cartels dominate fentanyl supply chains that feed directly into U.S. cities. They control corridors that influence migration flows. They operate with paramilitary capabilities. From Washington’s perspective, low state capacity in Mexico is a hemispheric security threat.

• And in that context, the authorization of U.S. Navy training looks less like routine military exchange and more like pre-positioning.

Yes, but. Sheinbaum faces a structural dilemma. Resist too openly, and Trump escalates. Comply too fully, and she risks domestic backlash over sovereignty. So far, she has chosen compliance. The training authorization serves two functions. First, it demonstrates operational cooperation. It signals that Mexico is serious about strengthening its security forces and improving coordination. Second, it reduces the argument in Washington that unilateral action is necessary.

• If Mexico can show measurable progress, then intervention becomes harder to justify politically. But the line is thinner than it appears.

• Trump has already linked trade and security in negotiations surrounding USMCA reviews. Tariffs are leverage. Military posture is leverage. Public rhetoric is leverage.

Yes, and. The question is not whether Mexico has folded, but rather whether Sheinbaum is just buying time. By allowing controlled training missions, she retains legal and political oversight. The Senate authorization formalizes the presence and keeps it within institutional bounds. That matters domestically. It prevents the optics of secret deployments or executive concessions.

• Yet it also sets precedent. If joint training becomes routine, operational integration deepens, intelligence sharing expands, and special forces interoperability increases.

• And in a future crisis—say, a high-casualty cartel attack with cross-border implications—the leap from training cooperation to joint operations becomes smaller.

• This is the quiet transformation underway. Mexico is moving from rhetorical resistance to structured alignment. Not out of ideological affinity, but out of strategic necessity and effective hard power from Washington.

In conclusion. Trump has made clear that hemispheric instability will be treated as actionable. Venezuela was the demonstration case, and Mexico is the test of whether pressure works without boots on the ground. For now, Sheinbaum appears determined to ensure that intervention remains hypothetical.

• But beneath the diplomacy lies a harder truth: sovereignty today is increasingly defined by capacity. If Mexico cannot convincingly contain organized crime on its own, it will continue to operate under the shadow of U.S. security doctrine.

• The Senate vote was not dramatic, yet, strategically, it may mark the moment Mexico chose alignment over confrontation, exactly what Trump wanted.

The United States’ industrial base rests on a fragile foundation. Between 2020 and 2023, roughly 70% of U.S. rare earth mineral imports came from China. Malaysia accounted for 13%, Japan 6%, Estonia 5%, and the rest of the world barely registered. The dependency is not marginal; it is structural. From semiconductors and electric vehicles to precision-guided munitions, satellites, and advanced radar systems, rare earths sit at the core of both America’s commercial innovation and its military edge.

• Rare earth elements are critical inputs for permanent magnets used in F-35 fighter jets, missile guidance systems, naval propulsion technologies, wind turbines, and the entire ecosystem of consumer electronics.

• Companies like Apple, Tesla, and Lockheed Martin are directly exposed to disruptions in Chinese processing and export policy.

• In a geopolitical environment where Beijing has already demonstrated its willingness to weaponize trade, this level of reliance represents a strategic vulnerability.

Why it matters. Under the so-called Donroe Doctrine, hemispheric security and supply chain autonomy are increasingly treated as overlapping priorities. If Washington is willing to apply pressure in its near abroad to counter narcotrafficking and migration flows, it would be inconsistent not to address critical mineral dependency within the same framework. Strategic autonomy requires material autonomy. And the Western Hemisphere is not as poor in rare earth potential as often assumed.

• Brazil, in particular, stands out. It holds some of the largest known rare earth reserves outside Asia.

• According to the latest data from the U.S. Geological Survey and international industry estimates, Brazil ranks among the top countries globally in proven reserves. Yet its production remains modest relative to its geological potential.

• The gap between reserves and output signals underinvestment, regulatory bottlenecks, and limited downstream processing capacity rather than resource scarcity.

Between the lines. The map makes the broader point clear. Brazil is not alone. Several Latin American countries marked in red possess documented rare earth reserves. Bolivia, Argentina and Chile, already central to the lithium triangle, also sit atop other strategic minerals. Mexico has known deposits. Even countries that are not yet major producers have geological surveys pointing to untapped potential, like Colombia and Peru. The continent’s mineral wealth is diversified, but largely underdeveloped in the specific segment of rare earth extraction and processing.

• What is underestimated is not just the size of these reserves, but their relevance in the current geopolitical cycle. Rare earth mining is capital intensive, environmentally sensitive, and technologically demanding.

• China’s dominance is not solely a matter of geology; it stems from decades of state-backed investment in extraction, refining, and processing infrastructure. The United States cannot replicate that ecosystem overnight.

• But it can reduce concentration risk by negotiating preferential access, joint ventures, and secure supply corridors within allied Latin American states.

It’s the corollary, stupid. A hemispheric mineral strategy would align naturally with Washington’s broader regional agenda. Countries such as Brazil, Argentina, Colombia, and Mexico are complex partners with fluctuating political alignments, yet structurally embedded in Western markets. Incentivizing rare earth development through financing, technology transfer, and infrastructure investment would create mutual gains. For Latin America, it would mean higher value-added industrialization and reduced reliance on commodity export cycles.

• For the United States, it would mean diversified sourcing for industries that underpin both economic growth and national defense.

• There is also a defensive logic. As China expands its commercial footprint across South America through infrastructure lending and commodity contracts, mineral access becomes a long-term leverage tool. If Washington neglects this domain, Beijing will not.

• Rare earth reserves in Brazil or Argentina could easily become part of a Chinese-centered processing chain, reinforcing the very dependency the U.S. seeks to escape.

In conclusion. The Trump administration’s rhetoric has emphasized sovereignty, supply chain resilience, and hemispheric prioritization. Rare earths sit at the intersection of all three. If the corollary implies a more assertive posture in the Americas to secure strategic interests, critical minerals should be near the top of the list. Negotiated access agreements, co-investment in processing facilities, and long-term procurement contracts with allied governments would be less controversial than military deployments and more consequential for structural security.

• The vulnerability exposed by the 70% figure is measurable. The Western Hemisphere possesses part of the solution.

• Whether Washington chooses to treat rare earth diplomacy as a central pillar of hemispheric strategy will determine whether the next supply shock strengthens or weakens American leverage in a world of escalating great power competition.

The North American economic landscape is currently undergoing a paradigm shift, transitioning from a model of cooperative integration to one of strategic fragmentation.

In perspective. At the center of this transformation is the upcoming 2026 review of the USMCA, which has introduced a level of existential uncertainty unprecedented in regional trade history. The architectural assumptions of the original agreement have been upended by a new geopolitical reality where stability is no longer guaranteed.

• Originally intended to modernize NAFTA and provide a stable framework, the assumption that USMCA-compliant goods were immune to U.S. domestic policy was shattered when the U.S. utilized the International Emergency Economic Powers Act (IEEPA) to impose unilateral tariffs.

• Article 34.7, the sunset clause, which provides the capacity to extend the agreement without yearly confirmation, once championed to prevent the pact from becoming outdated, is now being utilized as a tool for leverage, transforming the review into a high-stakes negotiation where non-renewal is the ultimate bargaining chip.

• The review is no longer a technical audit but a critical test of North American cohesion, with the potential to either modernize the bloc or devolve into a zombie agreement that fails to provide the certainty required for long-cycle capital investment.

Economic asymmetries. Structural economic disparities grant the United States a permissive environment to exercise coercion without suffering significant domestic damage.

• While trade in goods and services with Mexico and Canada accounts for only 25% of the U.S. economy, it makes up roughly 70% of GDP for both Canada and Mexico, creating a lopsided dependency.

• This disparity allows the U.S. to sustain a trade war that would cause a low aggregate shock domestically but could lead to deeply problematic economic contractions and stagnation for its neighbors.

• Consequently, Canada and Mexico are caught in a dependency trap where they must continuously offer concessions—often in non-trade areas—to preserve the economic status quo and avoid GDP contractions.

Between the lines. The outcome of the review is being shaped by the divergent geopolitical inclinations and domestic constraints of the three national leaders. The U.S. administration’s strategy utilizes uncertainty, unpredictability, and constant risk management, forcing volatility into markets to maximize leverage over Ottawa and Mexico City.

• Sheinbaum has adopted a strategy that prioritizes de-escalation, focusing on technical compliance to preserve supply chains.

• Carney employs a campaign focused on trade diversification, especially through an agreement with China. Nonetheless, the room for maneuver is tightly constrained by U.S. threats regarding its proximity to closing a deal with China.

The chokepoints. Critical sectors have emerged as specific vulnerabilities where integration is increasingly challenged by U.S. demands for geopolitical alignment and reshoring.

• The automotive sector is a primary chokepoint—representing 30% of Mexico’s manufacturing output—especially with the U.S. pushing to restrict the “roll-up” mechanism to limit foreign content and incentivizing the production of core parts within its borders.

• For Canada, a major vulnerability is its aircraft sector. The U.S. has threatened to decertify Canadian aircraft, which would render that type of aircraft uninsurable, disrupting a significant portion of supply chains.

• Finally, Mexico’s energy reforms favoring state enterprises and Canada’s digital laws are viewed by Washington as discriminatory barriers that must be renegotiated to secure renewal of the agreement.

In conclusion. Failure to reach a unanimous consensus by July 1 could result in a zombie USMCA, where the agreement persists legally but operates under chronic uncertainty that deters long-term capital investment. To avoid this, Canada and Mexico will need to appease the U.S., accepting a weaker version of their sovereignty to maintain access to their largest trading partner.