**US strike on Mexico by December 31?** Trader sentiment reflects low implied probability because Mexico has consistently rejected direct U.S. military strikes on its territory, citing sovereignty concerns, while favoring intelligence sharing and coordinated maritime operations. Recent U.S. missile strikes on suspected drug vessels in international waters near Mexico’s Pacific coast have not extended to Mexican soil, and Mexican officials have publicly ruled out proposals for attacks in national waters or territory. Bilateral cooperation has included U.S. intelligence support for Mexican operations, such as the February 2026 killing of CJNG leader El Mencho, which triggered retaliatory cartel violence but remained under Mexican command. President Trump has repeatedly described cartels as controlling parts of Mexico and signaled intent to intensify land-based pressure, yet statements emphasize ongoing work with Mexican authorities rather than unilateral action. No qualifying drone, missile, or air strike inside Mexico has occurred, and scheduled diplomatic engagements plus Mexico’s firm stance on non-subordination continue to anchor the market’s assessment of near-term barriers.