Texas Border Business
TEXAS BORDER BUSINESS
“President López Obrador’s seizure of Vulcan’s deep-water port represents a flagrant expropriation of a lawfully permitted, U.S.-owned operation, and his administration’s assault on the rule of law is putting America’s economic and national security interests in jeopardy. We have repeatedly warned him that there would be substantial ramifications if his administration crossed this line. As he attempts to execute this lame-duck scheme, he will now quickly learn that we keep our promises. The incoming Mexican administration will not want to pay the crushing consequences for President López Obrador’s illegal actions, which violate both Mexican and international law, and we encourage them to intervene with all due haste in the mutually beneficial interest of both the Mexican and American people.” U.S. Senators John Cornyn (R-TX) and Katie Britt (R-AL)
In a stunning escalation of international tensions, U.S. Senators John Cornyn (R-TX) and Katie Britt (R-AL) have called for immediate action after the Mexican government, under the leadership of President Andrés Manuel López Obrador (AMLO), unlawfully seized a deep-water port owned by Vulcan Materials, a U.S. company. The seizure has drawn sharp criticism from American lawmakers, who warn of significant economic and diplomatic consequences if the issue is not swiftly resolved.
Vulcan Materials, a leading U.S.-based construction materials company, has operated in Mexico for over 35 years, primarily exporting limestone and other resources to the United States. The company’s deep-water port in Punta Venado in Quintana Roo has been a critical asset for its operations. However, Vulcan’s presence in Mexico has faced increasing challenges over the years.
In 2018, Vulcan initiated legal action under the North American Free Trade Agreement (NAFTA), accusing the Mexican government of harassment and illegal land-use changes and ultimately forcing the shutdown of some of its operations. This marked the beginning of an ongoing legal and diplomatic conflict that has only worsened with time.
Tensions reached a boiling point in May 2022 when Mexican military forces, acting under direct orders from AMLO, forcibly shut down Vulcan’s port and production activities. This military action shocked international observers and raised alarms about the stability of Mexico’s investment climate.
Then, on March 14, 2023, things took a more severe turn when Mexican military and police forces stormed Vulcan’s port at gunpoint, taking control of the facility. Though the forces later withdrew, AMLO continued to threaten further action against the company, making clear his intent to remove Vulcan from Mexican soil entirely. These aggressive maneuvers have triggered widespread condemnation, with many seeing them as an attack on foreign investment and international law.
Now, as AMLO nears the end of his presidency, his government has made another bold move by reportedly seizing Vulcan’s deep-water port once again. In response, Senators Cornyn and Britt issued a blistering statement condemning the seizure and highlighting the risks this poses to U.S. economic and national security interests.
“President López Obrador’s seizure of Vulcan’s deep-water port represents a flagrant expropriation of a lawfully permitted, U.S.-owned operation, and his administration’s assault on the rule of law is putting America’s economic and national security interests in jeopardy,” the Senators declared. They further emphasized that AMLO’s actions violate Mexican and international law, warning the incoming Mexican administration of severe consequences if they do not intervene immediately.
The Senators’ statement also highlighted even bigger concerns about how these moves might affect U.S.-Mexico relations. “We have repeatedly warned him that there would be substantial ramifications if his administration crossed this line. As he attempts to execute this lame-duck scheme, he will quickly learn that we keep our promises,” they stated.
The illegal seizure of a U.S.-owned port by a foreign government is not only a rare occurrence but also a highly concerning one. If this issue remains unresolved, it could spark significant economic consequences for Mexico, including trade sanctions, potential legal repercussions under international law, and a possible cooling of foreign investment in the country.
Furthermore, this action could complicate U.S.-Mexico relations, which are already troubled by tensions over immigration, trade, and security, and don’t forget water payments. The Senators’ sharp rebuke suggests that future negotiations between the two nations could be severely strained, particularly if the next Mexican administration does not address AMLO’s actions.
This case could set a troubling precedent for U.S. companies operating abroad. If other governments see such expropriations as permissible without facing severe consequences, it could deter future investment and encourage further illegal actions against U.S. firms around the globe.
Cornyn and Britt are urging the incoming Mexican government to act swiftly to rectify the situation before it spirals further out of control. As the senators warned, if a resolution is not reached, Mexico could face “crushing consequences” both diplomatically and economically. The focus now shifts to whether the next Mexican leadership will take steps to reverse the seizure and restore trust between the two nations.
Ultimately, this incident highlights the growing risks U.S. companies face when operating abroad and underscores the need for stronger protections for foreign investments under international law. As the situation develops, all eyes will be on the incoming Mexican administration handling this explosive issue.
