Mexico denies invasion risk after Trump's cartel military order
'There will be no invasion of Mexico,' Sheinbaum stated after The New York Times revealed Trump's secret directive authorising military force against cartels.
The Mexican foreign ministry later confirmed it would not permit US military operations on its soil.
The US embassy in Mexico emphasised joint efforts to combat drug trafficking, calling cartels a 'common enemy.'
US Ambassador Ronald Johnson reiterated the shared threat posed by violent criminal organisations.
The Pentagon deferred questions to the White House, which did not immediately confirm the order.
Trump's directive reportedly allows military action against cartels, including operations on foreign territory.
Earlier this year, his administration designated eight drug trafficking groups, including six Mexican cartels, as terrorist organisations.
A Venezuelan gang, the Cartel of the Suns, was recently added to the list for smuggling narcotics into the US.
The US Justice Department also increased its bounty on Venezuela's President Nicolás Maduro to $50 million.
Venezuela dismissed the allegations as baseless, with Foreign Minister Yvan Gil calling them a 'ridiculous smokescreen.'
Sheinbaum has worked to demonstrate Mexico's cooperation in combating cartels amid Trump's accusations of drug trafficking.
'We are collaborating, but there will be no invasion,' she stressed.
Mexico has consistently opposed any foreign military intervention in its territory.
Sheinbaum, known as the 'Trump whisperer,' has previously defused tensions over trade threats linked to drug smuggling. - AFP
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Trump call to oust Intel CEO may sidetrack chipmaker's turnaround
INTEL chief executive officer (CEO) Lip-Bu Tan is already facing an uphill battle in turning around the ailing chipmaker. Now, US president Donald Trump's demand that Tan resign over his ties to Chinese firms will only distract him from that task, two investors and a former senior employee said. Trump said last Thursday that Tan was 'highly conflicted' due to his Chinese connections. Reuters reported exclusively in April that Tan had invested in hundreds of Chinese firms, some of which were linked to the Chinese military. Tan may now have to mount an effort to reassure Trump that he remains the right person to revive the storied American chipmaker, pulling his focus away from the cost cuts he's trying to implement. 'It is distracting,' said Ryuta Makino, analyst at Intel investor Gabelli Funds, which, according to LSEG data, owns more than 200,000 shares in Intel. Spending more 'I think Trump will make goals for Intel to spend more, and I don't think Intel has the capabilities to spend more, like what Apple and Nvidia are doing.' AI chip market leader Nvidia and iPhone-maker Apple have committed hundreds of billions of dollars to expand domestic manufacturing, which, according to Trump, will bring jobs back home. Until recently, Intel had emerged as one of the biggest beneficiaries of the 2022 CHIPS Act, as former CEO Pat Gelsinger laid out plans to build advanced chipmaking factories. Tan, however, has significantly pared back such ambitions, as the company's goal of rivaling Taiwanese chipmaker TSMC's contract manufacturing chops have fallen short. Tan said last month that he would slow construction work on new factories in Ohio and planned to build factories only when he saw demand for Intel's chips, a move that is likely to further strain relations with Trump. The company, its board and Tan were making significant investments aligned with Trump's America First agenda, Intel said in a statement last Thursday, without any mention of Trump's demand. The statement was 'bland', said David Wagner, a portfolio manager at Intel shareholder Aptus Capital Advisors, which owns Intel stock through index funds. 'Either defend your leader, which will be the beginning of a difficult road ahead, or consider making a change,' Wagner said. Having this play out over a few months is not something that Intel can afford, he said. Tan himself released a statement late last Thursday. 'The United States has been my home for more than 40 years. 'I love this country and am profoundly grateful for the opportunities it has given me. 'I also love this company,' he said, adding that the board was 'fully supportive of the work we are doing to transform our company.' Built on trust Tan, a chip industry veteran, took the helm at Intel about six months ago, after the board ousted previous boss Gelsinger over years of missteps and burgeoning losses. The company's shares are largely flat this year after losing nearly two-thirds of their value last year. Tan was the CEO of chip-design software maker Cadence Design from 2008 through December 2021. Cadence last month agreed to plead guilty and pay more than US$140mil to resolve charges for selling its products to a Chinese military university believed to be involved in simulating nuclear blasts, Reuters reported. The sales to Chinese entities occurred under his leadership. Reuters reported last Wednesday that US Republican Senator Tom Cotton sent a letter to Intel's board chair with questions about Tan's ties to Chinese firms and the criminal case involving Cadence. 'There has been a lot of misinformation circulating about my past roles,' Tan said in his statement. 'I have always operated within the highest legal and ethical standards. My reputation has been built on trust,' he said. It is not illegal for US citizens to hold stakes in Chinese companies unless those companies have been added to the US Treasury's Chinese Military-Industrial Complex Companies List, which explicitly bans such investments. Reuters in April had found no evidence that Tan at the time was invested directly in any company on that list. Eroding investor confidence But Trump's remarks have now forced the limelight on an issue that could erode investor confidence. 'If you add in another layer of government scrutiny, and everybody looking into how the company is doing whatever it's doing ... that just makes it harder,' said a former senior executive at Intel, who was familiar with the company's strategy under Gelsinger. The source, who declined to be named, was let go as part of Gelsinger's workforce reduction drive last year. Tan's strategy is to 'get rid of all of the non-productive parts of the company and really focus on a key few products,' the person said. 'If (Tan) leaves, it's going to just prolong whatever Intel has to do and needs to do really quickly.' — Reuters Arsheeya Bajwa writes for Reuters. The views expressed here are the writer's own.
The Star
2 hours ago
- The Star
Exporters weigh options to deal with new US levy
MUMBAI: Indian exporters who built their businesses on Americans' demand for affordable goods are redrawing their strategies and weighing alternatives to reduce the pain from US President Donald Trump's shock 50% levy on imports. Trump's decision to double tariffs in the space of a week will make India-made apparels to generic drugs prohibitively expensive and can heavily disrupt exports, if not bring them to a grinding halt for many smaller businesses. 'This is worse than Covid for us,' said Lalit Thukral, founder of apparel exporter Twenty Second Miles, who fears the industry will have to sell his goods at a loss and comparing the tariff-led disruption to the coronavirus pandemic. 'At least, there seemed to be an end to it. This tariff situation is just getting worse.' While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the United States. Gokaldas Exports Ltd, one of India's largest apparel exporters that earns about 70% of its revenue from the United States, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' managing director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product (GDP) by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' – remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. 'The additional 25% oil penalty tariff would take the hit to US-bound exports to 60%, dragging GDP by 0.9%. 'This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods – all labour-intensive industries,' said Chetna Kumar and Adam Farrar of Bloomberg Economics. The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd, which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the United States, Reuters reported last week. Kalyan Jewellers India Ltd may consider expanding its manufacturing operations in Dubai to navigate US tariffs, executive director Ramesh Kalyanaraman said in an interview with Bloomberg TV. While Indian drugmakers are awaiting clarity on sectoral tariffs imposed by the United States, many of them have already begun scenario planning given Trump's dire threats. 'We'll be putting a initially small tariff on pharmaceuticals, but in one year – one and a half years, maximum – it's going to go to 150% and then it's going to go to 250% because we want pharmaceuticals made in our country,' Trump had said in an interview on CNBC. Alembic Pharmaceuticals Ltd, which earns about 30% of its revenue from the United States, sees acquisitions there as a way of boosting manufacturing in the region, its joint managing director Pranav Amin told Bloomberg News. Aurobindo Pharma Ltd, which counts on the United States for nearly 50% of its sales, announced the acquisition of Indiana-based Lannett Co on July 30 in a deal that will help expand its US manufacturing footprint. About US$3bil worth of auto components exports will be affected, according to data from the Automotive Component Manufacturers Association. A 50% tariff also makes India the worse off among its peers such as Vietnam, Indonesia and China. Firms elsewhere are also actively trying to lure non-American customers to diversify their customer base and market presence. Welspun Living Ltd, which sells home fabrics in the United States, told analysts last week that it is looking at the United Kingdom, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the United States, but is now looking to double down on European nations, according to its founder V Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. — Bloomberg
The Star
2 hours ago
- The Star
Chip sector on edge over tariffs
ALL too soon, another upheaval is looming for the semiconductor sector. On Thursday, US president Donald Trump sent shockwaves through the industry, threatening a 100% tariff on 'chips and semiconductors' imports – but not for companies that are 'building or have committed to build in the US'. And the reaction from our players was as expected. 'If the United States really goes ahead with the 100% tariff, our semiconductor foreign direct investment will be severely impacted,' QES Group Bhd managing director and president Chew Ne Weng tells StarBiz 7. QES, an automated test equipment (ATE) player, generates about 40% of its revenue from multinational corporations (MNCs) in the United States, Europe, Japan, Taiwan and South Korea along with about 5% from local and Chinese outsourced semiconductor assembly and test (Osat) clients. Chew says affected companies will likely only ship products meant for the US market to the United States, with the balance redirected to other intended countries to avoid the 100% tariffs. Currently, US MNCs operating manufacturing sites across multiple countries will consolidate their inventory in the United States for global distribution. 'Semiconductor MNCs and even local Osats will have to re-plan their expansion strategies, which will affect the ecosystem of ATE players,' he says. Chew adds these changes will take time – at least three years – to move production to the United States. 'Hopefully, this will ease the immediate impact and allow for a more gradual shift, with the hope that Trump's reign will end by 2028,' he says. For QES, it may have to re-strategise by localising its manufacturing strategy with a 'made in US for US' and 'made in China for China' approach. However, for now it is business as usual as the group's exposure to the US market is very minimal, at less than 3% of total revenue. 'We will not rush to set up a manufacturing site in the United States and will monitor the situation over the next 12 months or so. The group will also explore options with our US-based joint venture partner, Applied Engineering Inc, to mitigate the impact from tariffs,' he says. Trump's 100% tariff salvo came barely a week after Ministry of Investment, Trade and Industry (Miti) Minister Tengku Datuk Seri Zafrul Abdul Aziz confirmed that local semiconductor exports to the United States will remain exempted from the 19% reciprocal tariffs it imposed on Malaysia. Tengku Zafrul stressed the exemptions are conditional and could change depending on Washington's evolving policies – particularly the outcome of the ongoing Section 232 investigation, which was initially expected to conclude in December. Section 232 allows Trump to impose tariffs on foreign products in the interest of national security. Although the proposed 100% duties cannot be enacted until this investigation is completed, Trump's latest warning suggests that a decision may be reached sooner than originally anticipated. Malaysia exported RM119bil worth of electrical and electronics products to the United States in 2024, with semiconductors alone accounting for RM60.6bil. Of those semiconductor exports, 68% came from American companies based in Malaysia. The country also supplies around 25% of the United States' semiconductor test and assembly needs. Other local semiconductor businesses believe it is too early to tell how the punitive tariffs will affect their operations. Mi Technovation founder and group chief executive officer Oh Kuang Eng says the company is gathering feedback from its customers. 'At this stage, we do not anticipate any changes and will continue with our expansion as planned. We will closely monitor developments over the next couple of weeks,' he says. Oh maintains that given the group's minimal trade exposure to the United States, at around 1% of its business, the impact from the potential 100% tariffs on the sector 'would not be significant'. Another semiconductor company, speaking on the condition of anonymity, says the 100% tariff will 'certainly impact capital expenditure (capex) planning, overall business and the entire semiconductor industry'. The firm says it is business as usual as the impact will mainly be on its customers who have yet to take any action. It remains hopeful that tariff exemptions may be granted based on Harmonised System (HS) code classifications when exporting goods to the United States. 'We are taking a prudent yet forward-looking approach. We are proceeding with strategic capital investments, especially in areas backed by committed demand or long-term agreements. 'At the same time, we are actively exploring alternative material sources, strengthening regional supplier partnerships, and engaging with key stakeholders to reinforce the resilience of our supply chain,' it adds. HS codes are special numbers used by customs to identify what type of product you are trading. At this stage, key details like whether the tariff on the sector will apply to the product, component, company or country level, remain unknown. It is also unclear which products or HS codes count as 'semiconductors and chips' under the new tariff, or how derivative products (such as electronics containing chips) will be treated. Some experts view the 100% tariff as more posturing than enforceable policy to accelerate reshoring efforts back to the United States. Looking at the present carve-outs, it does suggest the tariff ruling is likely to be on a company-by-company basis rather than a blanket tariff rate. 'Nobody knows the impact as of today. Firstly, it is subject to the category of semiconductor products. Bear in mind, Malaysia does not fabricate any chips and sell them to the United States,' Public Investment Bank Research senior analyst Chong Hoe Leong says. Chong says relocation due to the tariffs is 'highly unlikely' for Malaysian players due to the high set-up and operating costs. On the other hand, RHB Research senior analyst Lee Meng Horng says the majority of Malaysian-listed semiconductor and technology supply chain companies do not directly export integrated circuits, components or equipment to the United States, thus limiting their direct exposure to the proposed tariffs. 'Most of the listed players (except for a few with high customer concentration) have direct US exposure of less than 10%, if any,' he says. That said, Lee is of the view that a full-scale tariff implementation could disrupt global trade flows. With the United States accounting for roughly 10% to 15% of global semiconductor demand, he says a worst-case scenario involving aggressive onshoring could pose some substitution risks for Asian manufacturing bases. However, he opines that while the trend of onshoring advanced semiconductor activities (like design, research and development, and front-end wafer fabrication) to the United States is already underway, it is unlikely to be the same for back-end semiconductor processes. According to Lee, the latter, which account for less than 30% of the total value chain and typically operate at lower margins, are unlikely to be fully onshored due to their lower economic returns and scale-dependent nature. Moreover, Phillip Nova senior analyst Danish Lim says equipment makers would feel the pain indirectly via second order effects should the 100% tariff be imposed. He highlights that in the worst-case scenario, Osats shipping to US customers could see margins take a hit unless customers absorb tariffs or relocate assembly. 'Local tool and automation makers (Vitrox Corp Bhd , Pentamaster Corp Bhd , Greatech Technology Bhd ) could see indirect risks as Osats could freeze capex and delay new orders,' he says. Lim says it is 'certainly possible', should strict chip sectoral tariffs be imposed on Malaysia, that global original equipment manufacturers and US semiconductor firms may accelerate pushing for 'friend-shoring' elsewhere or require Malaysian partners to establish US-based production lines. This could pressure domestic Osats and toolmakers to invest overseas, dilute domestic expansions or reconfigure their global manufacturing footprint.
