Ongoing diplomatic engagement between the Trump administration and Mexican President Claudia Sheinbaum has anchored trader expectations against any U.S. invasion of Mexico in 2026. Early-year statements about potential strikes on cartels prompted swift bilateral clarifications ruling out unilateral military deployment on Mexican soil, with both sides emphasizing intelligence sharing, extraditions, and coordinated enforcement instead. Subsequent Mexican-led operations against groups like the Jalisco New Generation Cartel, backed by U.S. intelligence but without American combat troops or territorial objectives, have reinforced this pattern. Strong economic ties under the USMCA framework and a focus on sanctions and border interdiction further reduce escalation risks. While a major security breakdown or abrupt policy reversal before December 31 could theoretically shift outcomes, current cooperation and sovereignty commitments support the prevailing consensus on No.