KEY POINTS:
- Extortion in Mexico nearly doubled in Mexico City in early 2025, with cases rising 10% nationally despite other crimes declining
- A men’s clothing store dating to 1936 closed after years of threats, representing thousands of similar business closures across Mexico
- President Claudia Sheinbaum unveiled a national anti-extortion strategy including constitutional reforms and specialized prosecution units
- Business leaders and security experts express skepticism about the government’s ability to combat deeply entrenched criminal networks
- American companies increasingly face extortion threats, with cartels infiltrating supply chains and distribution networks
Mexico’s extortion crisis has reached unprecedented levels, forcing thousands of businesses to close their doors permanently as criminal organizations expand their stranglehold on the economy, according to Associated Press reporting. The crisis prompted President Claudia Sheinbaum’s administration to announce a comprehensive national strategy this week, though experts remain divided on whether the measures will effectively combat the deeply rooted problem.
The human cost of Mexico’s extortion epidemic is exemplified by one family’s tragedy in Mexico City’s historic center. According to AP News, a men’s clothing store that had operated since 1936 was forced to close in December 2023 after years of escalating threats that began with a phone call demanding 10,000 pesos ($500) weekly. The anonymous shop owner told AP that the extortionists warned him to “prepare to face the consequences” when he initially refused to pay.
Staggering Economic Impact
According to the Mexican Employers’ Association, Coparmex, extortion cost businesses approximately $1.3 billion in 2023, as reported by AP News and Fortune. The crisis has intensified in 2025, with extortion cases rising 10% nationally in the first quarter compared to the same period last year, even as other major crimes declined.
Mexico City has emerged as a particular hotspot for the crime. According to federal crime data cited by AP News, reported extortion cases in the capital nearly doubled in the first five months of 2025 to 498, up from 249 for the same period in 2024. This represents the highest total at this point in the year in the past six years.
Government Response and New Strategy
President Sheinbaum’s administration announced a multi-pronged national strategy against extortion on July 10, 2025. According to Mexico News Daily, Security Minister Omar GarcÃa Harfuch outlined five core components of the strategy:
- Creation of state-based anti-extortion units
- A national phone number for anonymous extortion reports
- Power to immediately cancel phone numbers used for extortion calls
- Involvement of Mexico’s Financial Intelligence Unit to freeze bank accounts
- A national prevention campaign
Sheinbaum also submitted a constitutional reform proposal to Congress that would establish a General Law Against Extortion. As reported by Mexico News Daily, the president explained that this would shift the burden of prosecution from victims to the state: “So we’re removing that burden from the victim. Who assumes it? The Mexican state.”
Opposing Views and Skepticism
However, security experts and analysts have expressed significant skepticism about the effectiveness of these measures. Mike Vigil, a former head of the DEA’s foreign operations, told AP News that the new plan appears to be “more of the same.”
Carlos Bravo Regidor, a political analyst, told NPR that while Sheinbaum is emphasizing intelligence-based approaches, “Cash transfers in general have become like a one-size-fits-all solution” regarding social programs aimed at preventing recruitment by cartels. He noted there’s no evidence these programs are working: “Whatever the amount that the state provides… it’s not competitive in comparison with the money they can get if they join the ranks of crime.”
Amanda Mattingly, former U.S. diplomat and founder of ACM Global Intelligence, provided historical context to the Inter-American Dialogue: “A decade ago, I worked on a project in Mexico assessing the risk of organized crime infiltrating a multinational operating in the country. We deemed the risk ‘high.'” She noted that under President López Obrador’s administration, Mexico experienced “the most violent period in Mexico’s history, with more than 193,000 homicides recorded since 2018.”
The Underreporting Crisis
A critical challenge in addressing extortion is the massive underreporting of cases. According to Mexico’s National Institute for Statistics and Geography, as cited by AP News, approximately 97% of extortion cases went unreported in 2023. Francisco Rivas, general director of the National Citizens’ Observatory, told Mexico News Daily that more than 99% of acts of extortion are not reported to authorities.
Mexico City Police Chief Pablo Vázquez Camacho acknowledged this challenge in an AP interview: “We can’t solve something that we’re not even seeing or that isn’t being reported.”
Business Community Under Siege
The extortion crisis has evolved beyond targeting small businesses to affecting major corporations. According to The Washington Post, even tortilla shops—a staple of Mexican neighborhoods—have become systematic targets, with criminal groups controlling pricing and distribution. “We’re practically at the point where criminals set the price of tortillas,” Homero López, head of the National Council of the Tortilla Industry, told The Washington Post.
The American Chamber of Commerce in Mexico released a survey in 2024 revealing that 12% of respondents said “organized crime has taken partial control of the sales, distribution and/or pricing of their goods,” according to AP News. The survey also found that 45% of companies had received extortion demands, and about half reported attacks on trucks carrying their products.
NewsNation reported that American companies are increasingly targeted, with a 2025 Worldwide Threat Assessment from security firm Global Guardian warning: “Cartel extortion of Mexican businesses has expanded in both scope and the size of their targets, portending a possible future for American firms.”
Regional Variations and Criminal Evolution
Security analyst David Saucedo told AP that the Sinaloa and Jalisco New Generation cartels have made extortion “one of the divisions of their criminal portfolios.” However, experts caution against oversimplifying the perpetrators.
Arantza Alonso, senior analyst for the Americas at Verisk Maplecroft, told the Inter-American Dialogue that extortion has been recognized “as a growing problem affecting most businesses across the country,” leading the crime to become prevalent in almost two-thirds of Mexico’s 32 states.
Philip Johnson, lecturer at Flinders University, offered insight into the dynamics, telling the Inter-American Dialogue: “Criminal dynamics of extortion need to be further investigated at the local level. Criminal franchises—sustained by corruption and impunity—and not drug cartels seem to be essentially involved in this illicit business.”
Political Context and Challenges
The new security strategy represents a significant shift from former President López Obrador’s “hugs not bullets” approach. According to Foreign Affairs, Sheinbaum has “immediately pivoted on security” despite loyally carrying forward other initiatives from her predecessor.
However, Foreign Affairs also reported that Mexico’s 2025 budget reduced security spending by 36%, even though state police in half of Mexican states make less than minimum wage. The publication noted this presents a major obstacle to transformation.
Armando Vargas, the top security expert at México Evalúa, told Americas Quarterly that the data Sheinbaum shows in her morning press conferences “aren’t useful to sustain that our country is on the road to pacification.”
Looking Forward
As Mexico grapples with this crisis, the effectiveness of the new strategy remains to be seen. Yair Mendoza, a security researcher at México Evalúa, told Animal PolÃtico that citizens will be able to assess whether the strategy is working by the end of this year, with success indicated by “a decrease in extortion, at least in the federal entities” with the highest incidence of the crime.
For business owners like Daniel Bernardi, whose family has run a popsicle shop in Mexico City’s historic center for 85 years, the situation has become a grim reality. As he told AP News with resignation: “There isn’t much to do. You pay when you have to pay.”
The clothing store owner who was forced to close after 87 years summed up the tragedy facing thousands of Mexican businesses: “When I closed I felt very sad. And then it made me so mad to think that I could still go on, but because of fear I couldn’t. You work your whole life for them to destroy it.”
