RIO DE JANEIRO — Half a century after former U.S. President Richard Nixon launched the war on drugs, global cocaine output and consumption are at record highs. According to the UN’s latest drug report, cocaine production jumped roughly a third in 2023 to over 3,700 tons, with usage rising to an estimated 25 million people. Over the past decade, narcotics supply chains have diversified, and demand has hardly blinked.
President Donald Trump’s second term has repackaged the drug war with sharper geopolitical edges. While fentanyl from Chinese sources seemed to be the president’s main focus during his campaign, the more traditional target of cocaine has lately become more prominent. Washington has pledged to “disrupt the supply chain from tooth to tail” and to “partner with – or otherwise hold accountable” source countries, language mirrored in the U.S. Drug Enforcement Administration (DEA) National Drug Threat Assessment 2024.
The most significant legal swing is to treat criminal syndicates as terrorists, collapsing the line between crime control and counter-terrorism and unlocking sanctions, asset freezes and, crucially, use-of-force options. In February, the State Department designated the Cártel de Sinaloa, Cártel de Jalisco Nueva Generación, Cártel del Noreste, Cártel del Golfo, Cárteles Unidos, La Nueva Familia Michoacana, MS-13 and Tren de Aragua as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). The roster has since widened to include gangs from Ecuador to Haiti.
Importantly, Washington’s legal threats are paired with action. In recent weeks, the administration has green-lit maritime interdictions and disclosed multiple strikes on alleged drug-smuggling boats operating out of Venezuela. These operations have rattled regional chancelleries and stirred debate on international law and oversight. Legal analysts question whether these uses of force comport with the UN Charter and the law of the sea and warn of sovereignty, extraterritoriality and due-process concerns.
Earlier this week, the U.S. “decertified” Venezuela, Bolivia and Colombia for failing to meet counternarcotics obligations. It is a stinging public rebuke to Colombia, the U.S.’s closest anti-drug partner, albeit dressed with a waiver to keep select aid flowing. The move comes amid record coca cultivation and disputes over Bogotá’s strategy under President Gustavo Petro, who lashed out at the decision, accusing the U.S. of seeking to “participate” in the nation’s politics ahead of the 2026 presidential elections.
The temperature with Mexico is also rising. Reporting suggests Trump signed a directive opening the door to U.S. military force against cartels on foreign soil and at sea. Mexico’s president, Claudia Sheinbaum, has pushed back hard on sovereignty grounds, but has also handed over dozens of cartel members to the U.S.
Altogether, these actions raise an obvious question: Will this new and reinforced strategy bear fruit for the U.S. and reduce the overall production and trafficking of illicit drugs?
Power projection by other means
From Latin America and the Caribbean’s vantage, the Trump administration’s reboot often looks more like a hemispheric strategy than a counternarcotics policy. Label cartels as terrorist organizations, and Washington can sanction, seize and strike. Decertify a partner, and leverage over aid, trade and security co-operation expands. Fold narcotics into terrorism, and the Pentagon’s toolkit becomes fair game. That mix gives the U.S. a convenient pretext to show the flag across the hemisphere, lean on reluctant allies, and isolate adversaries, all while claiming the mantle of anti-crime virtue.
But the risks are mounting. Colombia’s decertification has already strained a keystone relationship. Mexico’s refusal to countenance foreign troops is a reminder that sovereignty politics run hot. Military strikes carry legal hazards and the constant risk of miscalculation. Designations that yoke criminal groups to terrorism may chill financial flows and complicate compliance for banks, shippers and insurers, but they also invite policy backlash if locals see them as extrajudicial or agenda-driven.
For all the bluster, the odds of shrinking the cocaine market are poor. The UNODC’s data show cocaine production, seizures and consumption simultaneously hitting records—hallmarks of displacement, not defeat. Experience demonstrates that interdiction, however forceful, pushes flows onto new routes rather than choking them.
Price signals offer another clue. Meta-reviews suggest demand for illicit drugs is weakly price-inelastic. When enforcement squeezes supply, prices tend to rise, but demand falls in a less-than-proportional manner. The result is cushioned cartel revenues and incentives for displacement, adulteration or violence (and sometimes all three).
The fentanyl pipeline is a case study in adaptation. Investigative reports have shown how chemical brokers in China feed Mexican labs despite regulatory pressure, illustrating just how flexible supply chains have become. While it is true that there was a 27% fall in U.S. overdose deaths in 2024, these gains are attributed mainly to naloxone, treatment access and shifts in the domestic drug mix. The current Justice Department has chalked up extraditions and indictments, but the overall tide of drugs keeps flowing.
More of the same, or worse
The cocaine economy has three properties that frustrate anti-drug crusades. The first is resilience: Production rapidly relocates (within and beyond the Andes), trafficking routes multiply (across the Amazon to West Africa and Europe), and wholesale margins expand when enforcement lifts risk premia. The second is adaptation: Synthetics and cutting agents blur product lines and stabilize street supply. And the third is politics: Every unilateral shove from Washington hardens sovereignty reflexes and narrows the space for what durably works, such as coordinated financial crime controls, precursor governance, community security, treatment, and demand reduction.
Because demand is inelastic, squeezing one corridor often raises revenues elsewhere. As a result, cartels reroute, retail prices firm, and violence can spike in contested nodes, as Ecuador’s most recent security crisis shows. Illicit-drug demand responds weakly to price, exactly the condition under which interdiction boosts profits and entrenches criminal governance rather than breaking it.
Short of regulating and decriminalizing certain drugs, a strategy that genuinely threatens the business model of drug cartels would blend four elements. These include relentless, co-operative action on finance (beneficial ownership, trade-based money-laundering); verified controls on precursors and dual-use chemicals; targeted violence-reduction and institution-building where cartels recruit; and treatment and demand reduction at home. The first two require trust and shared enforcement, while the last two require patience and politics. Today’s path, with its terror labels, decertifications and episodic strikes, risks alienating the very partners Washington needs.
The U.S.’s expanded drug war may project power, but it is unlikely to dent the market. Allies will pull away if they see coercion rather than partnership. For their part, cartels and associated drug markets will adjust because demand hardly flinches. All the while, the region will become more brittle as tensions over sovereignty multiply.
Reading Time: 4 minutesMuggah is a co-founder and research director of the Igarapé Institute, a leading think tank in Brazil. He is also co-founder of the SecDev Group and SecDev Foundation, digital security and risk analysis groups with global reach.
Tags: Latin America, Security, Trump, Trump and Latin America, U.S. Drug Policy
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