This Memorial Day weekend, I am thinking about the men and women who gave everything to defend the values that make this country worth defending. Among them, thousands of veterans with roots on both sides of the border, soldiers who grew up in Nogales, El Paso, Laredo, and San Diego, who served under a flag that promised their families a future here. That promise is what animates everything I write in this newsletter. And this week, that promise is under pressure from multiple directions at once. The USMCA deadline is five weeks away. Billions in semiconductor investment are flowing into northern Mexico. Remittances are at risk. And legal immigration is being dismantled at twice the rate of anything happening at the physical border. Here is what I know.

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Five weeks. That is all the time left before the July 1 deadline that will determine whether the United States, Mexico, and Canada extend the USMCA for another 16 years, enter a grinding annual review cycle, or begin a clock that ends with the agreement's expiration in 2036. I have spent time this past week speaking with people close to the negotiations on both sides of the border, and what I am hearing is sobering. A clean extension is no longer realistic. What remains is a high-stakes negotiation, and from what I know, it is increasingly heading toward bilateral agreements rather than one overarching trilateral deal. Washington and Mexico City have already launched the review process bilaterally, without Canada, with separate bilateral talks expected between the U.S. and Canada in parallel. The old USMCA architecture, a single agreement binding all three, may give way to a tiered framework where Washington locks in specific commitments country by country.

For Mexico, three issues will define the outcome: critical minerals, judicial reform, and security. On critical minerals, Washington is not asking about extraction alone. Policymakers want Mexico embedded as a trusted processing and sourcing platform, not merely a digging operation. Mexico has the reserves. What it lacks is the regulatory architecture to give investors the certainty they need to commit capital over 20 to 30 year horizons.

The judicial reform question is equally urgent. Mexico's newly elected judge system and the broader constitutional overhaul by Morena are raising serious alarms in Washington about legal predictability. For any investor evaluating a semiconductor fab, a lithium processing facility, or a nearshoring operation along the Phoenix to Nogales corridor, rule of law is not a secondary concern. It is the threshold question.

And then there is security. The indictment of the Sinaloa governor and nine other officials by the Southern District of New York represents a fundamental expansion of the scope of U.S. security demands on Mexico. Washington's argument is structural: that elected officials protect and depend on the cartels producing the fentanyl flowing north. Various sources indicate the U.S. is likely to demand Mexico hand over more top-level government officials in the coming weeks, using the USMCA review as leverage to force a corruption crackdown that past administrations never delivered.

I have been saying for years that the Phoenix to Nogales corridor is one of the most strategically valuable economic corridors in the Western Hemisphere. What is happening right now in Ciudad Juárez is the proof point that the broader thesis is correct, and it should be a wake-up call for anyone still sleeping on northern Mexico's industrial transformation.

Taiwanese investment in Juárez is approaching $3 billion over four years, turning the border city into an emerging hub for semiconductor components and server production. That is not a rumor or a projection. That is capital already committed, facilities already being built, and supply chains already being restructured around the assumption that North America is the future of trusted technology manufacturing. TSMC and Intel are already deeply invested in Phoenix. What is happening in Juárez is the Mexican side of the same bet.

This matters enormously for the USMCA review happening simultaneously. Washington wants Mexico embedded as a trusted sourcing and processing partner, not a passive assembly floor. The Juárez semiconductor story is evidence that the private sector is already voting with its capital. The policy architecture just needs to catch up. That is exactly the kind of binational investment thesis that Intermestic Capital was built around: identifying where geopolitics, trade policy, and private capital converge before the rest of the market catches on.

The SouthBridge Nogales project sits at this same intersection. A smart corridor connecting Phoenix's semiconductor ecosystem to Mexico's industrial base, anchored by the kind of national security investment logic that makes EB-5 capital not just attractive but essential. When the U.S. government is restructuring its entire technology supply chain away from China, and when Taiwanese firms are betting billions on northern Mexico, the question for investors is not whether this corridor matters. The question is whether you are positioned before the window closes.

The Juárez moment is not a Juárez story. It is a North American story, and the corridor I grew up on is at the center of it.

Last week, DHS Secretary Markwayne Mullin traveled to Mexico City for a two-day visit with President Claudia Sheinbaum. The visit came in the wake of tensions over the deaths of two CIA agents at Mexico's northern border and U.S. drug trafficking indictments against 10 Mexican officials. Both sides emerged pledging cooperation. Both sides know the relationship is under enormous strain.

Here is what gets lost in the diplomatic language. Mexico's economy cannot afford this level of friction. Remittances are the country's second largest source of foreign exchange, totaling nearly $62 billion annually and representing roughly 3.4% of Mexico's GDP. They fell 4.6% in 2025, the biggest annual decline in 16 years, driven by deportation fears, a softening U.S. labor market, and a stronger peso. Now comes a May 19 executive order directing banks to screen customers for immigration status. That adds another layer of fear to communities already sending fewer transfers home. For states like Michoacán, Guanajuato, and Jalisco, where remittances function as a de facto social safety net, the consequences will be felt at the kitchen table, not in a press release.

Here is what frustrates me most. This is negotiable. A president with a stronger bilateral relationship could be at the table making the case that squeezing remittances punishes families, not cartels. Instead, Sheinbaum this week publicly criticized the U.S. indictment of former Cuban president Raúl Castro, questioning the timing and framing it as part of a longstanding pattern of U.S. interventionism. She also ruled out discussing the cases of the 10 indicted Mexican officials during her meeting with Mullin, some of whom belong to her own Morena party. Mexico continues deepening its oil relationship with Cuba and supporting Havana in multilateral forums.

Every one of those decisions has a cost. Ordinary Mexican families sending money home are the ones paying it. Good diplomacy requires discipline. Sheinbaum has the right to her principles. But principles without leverage are just statements, and Mexico's leverage shrinks every time she picks a fight she does not need.

This week the Trump administration announced that people holding temporary visas who seek to adjust their immigration status and obtain a green card must now return to their home countries to apply through consular processing. Let that sink in for a moment. We are not talking about people who crossed a border without authorization. We are talking about students, skilled workers, researchers, and professionals who came here legally, built lives here legally, and are now being told to leave if they want to stay permanently.

The political conversation around immigration has been dominated by enforcement and deportation, which polls well in certain zip codes. But here is the number that nobody in this administration wants to talk about. The cuts to legal immigration in 2026 are now twice as large on a monthly basis as the cuts to illegal immigration at the border. Twice. This is not an immigration enforcement story. This is a legal immigration dismantling story, and the approximately 40 million Mexican-connected residents in this country feel it in their families, their workplaces, and their communities every single day.

I spent years as a mayor on the border and as a candidate for governor of Arizona. I know what it looks like when policy is designed for a political base rather than for a functioning society. This policy is not about security. People adjusting status from a valid visa are not a security threat. They went through background checks. They paid fees. They followed the rules. This is about reducing the pathway to permanent residency, which leads to citizenship, which shapes the electorate. That calculation is not hidden. It is the point.

The communities I come from, the people I grew up with in Nogales, built this country through exactly the legal pathway now being systematically shut. The fight ahead is not just about who gets to stay. It is about what kind of country we intend to be, and whether the promise of legal immigration still means anything at all.

Thanks for reading this edition of my newsletter! I'd love to hear from you. Share your thoughts about what you think are the most critical issues that need to be addressed. Email me at [email protected] or connect with me on social media using the hashtag #Intermestic.

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