Bilateral security cooperation between the Trump administration and Mexican President Claudia Sheinbaum has intensified through intelligence sharing, extraditions of cartel figures, and joint targeting of groups like the Jalisco New Generation Cartel, including Mexico’s February 2026 operation that killed leader El Mencho with reported U.S. support. Mexico has repeatedly rejected unilateral U.S. strikes on its soil as a violation of sovereignty, while U.S. military actions have focused on maritime interdiction of drug vessels in international waters rather than land targets inside Mexico. These developments, alongside economic interdependence and the absence of congressional authorization for broader intervention, have anchored trader consensus at low implied probabilities for a qualifying U.S. drone, missile, or air strike on Mexican territory by December 31, 2026. Ongoing cartel violence and fentanyl flows remain potential catalysts, though scheduled diplomatic engagements and continued bilateral mechanisms could further reduce escalation risks.