“A Special Place with a Special Destiny”: How the United States Can Protect the Homeland and Expand Prosperity in the Western Hemisphere

On February 24, 1982, President Ronald Reagan stood before the Permanent Council of the Organization of American States (OAS). Reagan’s speech announced the creation of the Caribbean Basin Initiative (CBI), which sought “to develop an economic program that integrates trade, aid, and investment” for the region. The success of CBI, however, was directly linked to security. As President Reagan told the OAS, “Our economic and social program cannot work if our neighbors…must divert their resources, instead, to fight imported terrorism and armed attack.”¹ More than 40 years on, durable progress on the dual goals of security and economic prosperity continues to pose a major challenge for the United States in its own backyard.

Since President Reagan, arguably no president has been more focused on the Western Hemisphere than President Donald Trump in his second term. Successive U.S. administrations have struggled to make lasting progress on growing migration, transnational organized crime, and Chinese activity and influence in Latin America. In the past 18 months, the United States has ended the migration crisis, launched a vigorous campaign against the Mexican drug cartels and other narco-terrorist groups, captured Venezuelan dictator and kingpin Nicolás Maduro, and worked with Panama to push a Chinese port operator out of the Canal. Looking forward, the United States has an opportunity to make lasting homeland and regional security gains and create economic opportunities at home and across the Western Hemisphere.

Ending the Migration Crisis

One of the most visible homeland security accomplishments of the Trump Administration is the end to a hemisphere-wide migration crisis that brought millions of illegal immigrants into the United States from 2021 to 2024.² In 2025, migrant encounters at the U.S.-Mexico border declined by 89 percent from 2024.³ Less reported are the follow-on effects of this rapid decline on the rest of Latin America. Crossings at the Darién Gap, the dangerous jungle region between Colombia and Panama, have declined to nearly zero from an August 2023 high of 82,000 per month. This ended a migration route that spanned as many as 10 countries from Peru to the U.S. border.⁴

Preventing a future border crisis for the United States and a regional crisis for its neighbors will require maintaining policies that disincentivize migrants from making the dangerous journey north. These policies include stronger border security infrastructure, the rapid removal of illegal immigrants detained at the border, and continued cooperation with regional partners on repatriations. Longer term, however, making significant progress against armed criminal groups that terrorize populations across the hemisphere and deter investment and growth will be critical to avoiding a future crisis.

Dismantling the Cartel Business Model

Transnational criminal organizations (TCOs) in the Western Hemisphere represent a direct threat to the health and safety of Americans and terrorize tens of millions across Latin America. More than 500,000 Americans have died of fentanyl and cocaine overdoses since 2016.⁵ Most of the drugs fueling these tragic deaths are trafficked by the Cártel de Jalisco Nueva Generación (CJNG) and Cártel de Sinaloa, which maintain criminal networks reaching all 50 states.⁶ These groups operate as multinational businesses, running complex supply chains, repatriating revenue across borders, and using billions in profits to build military-like capabilities against security forces. Beyond drugs, TCOs have moved into extortion, fuel theft, illicit gold mining, and other activities to diversify their income streams and deepen control over territory.

The Trump Administration has made important progress in this fight. Designating 18 Latin American drug cartels and armed groups as foreign terrorist organizations opened the door to a whole new set of counterterrorism tools to degrade these groups.⁷ U.S. intelligence and training supported Mexico’s successful operation that killed CJNG leader El Mencho.⁸ Actions by the U.S. Treasury Department have resulted in the shuttering of three Mexican financial institutions linked to cartel money laundering and targeted Chinese and Indian fentanyl precursor networks.⁹

Here are three steps for the Trump Administration to go even further in dismantling the business model that sustains narco-terrorist groups:

1.     Significantly expand efforts by the Treasury Department to cut off financial institutions and illicit networks that support narco-terrorist groups from the U.S. financial system.

Disrupting and dismantling the illicit financial networks that sustain drug trafficking and other illicit activities strikes at the heart of the cartel business model and can weaken these groups in an enduring way. During the Trump Administration, Treasury has announced more than 30 sanctions and enforcement actions focused on TCOs in Latin America, including more than 20 actions focused on the Mexican drug cartels.¹⁰ Treasury should go further and identify financial institutions in key counter-narcotics partner countries that facilitate cartel money laundering. If the institution and the host government’s financial intelligence unit are unable or unwilling to remediate the exposure through bilateral cooperation measures, then Treasury should implement an escalating set of anti-money laundering and sanctions measures to mitigate the threat.¹¹ Treasury has already demonstrated this approach with significant success: the three Mexican financial institutions targeted in July 2025 were out of business or sold off before the Financial Crimes Enforcement Network order even took legal effect.¹²

2.     Leverage U.S. sanctions and criminal statutes to hold corrupt politicians accountable for profiting from narco-terrorist groups.

Drug cartels and armed groups gain strength from profitable illicit activities, but sustaining their position requires co-opting local political actors. In countries like Mexico and Colombia, the scale of narco-corruption often exceeds domestic capacity and will to arrest and prosecute corrupt politicians. Yet these illicit activities have a clear U.S. nexus: drugs crossing the border and money flowing through U.S. financial institutions. The Departments of the Treasury and Justice should undertake a comprehensive campaign targeting corrupt politicians across Latin America who enable narco-terrorist groups to harm Americans. The Trump Administration should use the January 2026 superseding indictment of Nicolás Maduro and the April 2026 indictment of sitting Sinaloa Governor Rubén Rocha Moya and other senior Mexican officials as models for this campaign.¹³

3.     Expand U.S. security assistance in Latin America to empower partner governments to take on armed groups and combat pervasive impunity.

The United States remains the premier provider of advice, training, and assistance for militaries, police forces, and legal systems across Latin America.¹⁴ Security assistance remains critical in the region to combat growing military-like capabilities of narco-terrorist groups and national impunity rates for crimes exceeding 90 percent in some countries, but it should not be an open-ended handout. These programs deliver significant value when they result in greater partner investments in security, generate increased partner capacity, and leverage congressionally mandated conditions to ensure partners meet their counter-narcotics commitments.

Bolstering U.S. Economic Strength in the Americas

The Western Hemisphere remains critical to U.S. economic security, both as a source of economic strength and a bulwark against economic threats to the homeland. More than one-third of global U.S. trade is within the Western Hemisphere, yet these supply chains are threatened by nearly two decades of expanding Chinese economic activity and influence across the Pacific. Outside of North America, four of the five largest economies in Latin America count China—not the United States—as their largest trading partner.¹⁵ China is also building infrastructure projects across the region, from the Chancay container port in Peru to a major bridge across the Panama Canal.¹⁶

Here is how the Trump Administration can bolster U.S. economic strength in the Western Hemisphere and roll back China’s gains:

1.     In North America, leverage the ongoing joint review process for the United States-Mexico-Canada Agreement (USMCA) to strengthen economic security cooperation in America’s most important trading relationships.

No set of trading relationships is more important to the U.S. economy than those within North America. Total U.S. goods trade with Mexico and Canada reached nearly $1.6 trillion in 2025, four times total trade with China.¹⁷ This relationship also creates vulnerabilities if partners cross economic security red lines with non-market economies like China. As negotiations continue under the USMCA’s joint review process, the United States should prioritize ensuring all partners have investment screening mechanisms to coordinate on potential foreign investment threats and address the shared threat posed by China’s global excess capacity.¹⁸ Canadian Prime Minister Mark Carney’s decision to deepen economic ties with China will make these efforts more difficult.¹⁹

2.     Outside of North America, the United States should develop and implement a clear strategy to mobilize investment across the region, reduce China’s control of critical supply chains and infrastructure, and support growth that creates new opportunities for American companies.

Latin America has historically struggled to attract private capital from outside the region.²⁰ China stepped in to fill that gap, at the expense of the United States. Washington is long overdue to put forward a credible economic counteroffer to Chinese financing and investment.

To address these challenges, the U.S. International Development Finance Corporation (DFC), Export-Import Bank (EXIM), and international financial institutions can help governments in the region identify infrastructure and economic needs, develop bankable projects, and reduce political risk for potential private sector investors.²¹ These efforts, along with new tools at DFC and EXIM, can mobilize private investment at multiples that could actually meet the region’s needs if the political will is present in partner countries. Finally, expanding the administration’s reciprocal trade deals in the region will create a network of Latin American partners who cooperate with the United States on investment security, export controls, and other policies.²²