**US strike on Mexico by December 31 remains at low implied probability around 7 percent amid ongoing border frictions but no confirmed kinetic action.** President Trump has repeatedly framed Mexican cartels as terrorist threats justifying potential U.S. military options, including strikes, while designating several groups as foreign terrorist organizations and exploring legal rationales. Mexico’s President Claudia Sheinbaum has consistently rejected any unilateral U.S. intervention on sovereign territory, stressing cooperation without subordination. Recent developments include a late-September cross-border shooting incident involving U.S. Coast Guard personnel that prompted limited troop deployments and joint operations on both sides, alongside rising cartel drone activity countered by U.S. laser systems. Expanded sanctions, extraditions, and binational anti-drone efforts have intensified pressure without crossing into direct strikes. Trader consensus reflects these sovereignty constraints and preference for coordinated law-enforcement measures over escalation.