U.S. Treasury Secretary Janet Yellen will travel to Mexico City this week to boost cooperation with Mexican counterparts on combating illicit finance and the trafficking of fentanyl, and work to strengthen Mexico's role in U.S. supply chains, Treasury officials said Monday.
Yellen's Tuesday-to-Thursday trip will include meetings with Mexican President Andres Manuel Lopez Obrador and the country's central bank governor and finance minister, among others, Treasury said in a statement.
The trip follows Treasury's announcement Monday of a counter-fentanyl "strike force" that will bring together the department's resources, including the Office of Terrorism and Financial Intelligence and the Internal Revenue Service's Criminal Investigation unit to disrupt illicit drug trafficking.
U.S. President Joe Biden and Chinese President Xi Jinping last month agreed to deepen cooperation to stem the flow of fentanyl precursor chemicals from China, which are often mixed by Mexican drug gangs before distribution in the U.S.
Illicit fentanyl and other synthetic opioids cause tens of thousands of overdose deaths every year. The formation of the task force comes as the Treasury in recent months has intensified its sanctions efforts targeting fentanyl logistics in Mexico.
"Treasury will use every tool at its disposal to disrupt the ability of drug traffickers to peddle this poison in our country," Yellen said in a statement.
Disguised
The Treasury for years has imposed sanctions on Mexican cartels and their money-laundering entities. While these have disrupted individual cartels, the efforts have done little to stem the overall cross-border drug trade, estimated at $20 billion to $30 billion a year, said Earl Anthony Wayne, a former U.S. ambassador to Mexico from 2011 to 2015.
"Somehow that money gets back to cartels," said Wayne, now a lecturer at American University's School of International Service. "Neither the U.S. nor Mexico has been very good at finding that money."
A senior U.S. Treasury official said Yellen will discuss with Mexican counterparts and financial institution executives ways to step up efforts to fight illicit drug finance, including better coordination of investigations, as narcotics traffickers "continue to innovate."
The goal is to be more effective at exposing drug supply chains that are disguised as legitimate commercial trade and cut off their access to financing, the Treasury official said. The department has imposed sanctions on over 250 entities related to drug trafficking in the past two years.
Friend-shoring, national security
During her trip, Yellen also will promote Mexico's role as a premier destination for the "friend-shoring" of U.S. supply chains to make them more resilient and promote U.S. national security interests, Treasury officials said.
Mexico this year has overtaken China as the largest U.S. trading partner, and investment continues to grow.
Among issues she plans to discuss are U.S. tax credits for electric vehicles produced in North America and new Treasury rules limiting the amount of Chinese-controlled content that can be allowed, which could impact Chinese investment in Mexico.
