Latin American Pulse for Monday, February 23, 2026

Mexican Army Kills CJNG Leader “El Mencho” in Jalisco Raid, Triggering Cartel Retaliation Across 20 States; Lula and South Korean President Lee Elevate Ties to Strategic Partnership in Seoul; Peru Taps Hernando de Soto as Prime Minister

Risk Snapshot

Mexico

Military Kills CJNG Leader “El Mencho” in Jalisco Raid; Cartel Retaliation Paralyzes Half the Country; U.S. Confirms Intelligence Support

What Happened

• Mexican special forces killed Nemesio Rubén Oseguera Cervantes, “El Mencho,” 59, during an operation in Tapalpa, Jalisco on Sunday morning. Oseguera was wounded in the raid and died while being airlifted to Mexico City. Four CJNG members were killed at the scene, three others (including Oseguera) died during transfer, two were arrested. Armoured vehicles, rocket launchers, and other weapons were seized.
• The U.S. had a $15 million bounty on Oseguera. The Defence Ministry confirmed the raid used “complementary information” from U.S. authorities. White House spokesperson Karoline Leavitt confirmed U.S. intelligence support, calling Oseguera a “top trafficker of fentanyl into our homeland.” Deputy Secretary of State Landau called it “a great development for Mexico, the US, Latin America, and the world.”
• CJNG retaliation was immediate and nationwide. Burning roadblocks appeared at more than 250 points across 20 states, including Jalisco, Michoacán, Guanajuato, Colima, Nayarit, Tamaulipas, Guerrero, Nuevo León, Puebla, and Veracruz. In Puerto Vallarta, a Costco was set ablaze. In Guadalajara, gunfire was reported and armed men torched a gas station. Pharmacies and convenience stores burned in Guanajuato.
• U.S., Canadian, and British embassies issued shelter-in-place orders for citizens across multiple states. U.S. government staff in Guadalajara, Puerto Vallarta, Cancún, Playa del Carmen, Cozumel, Reynosa, Tijuana, and Michoacán will shelter and work remotely Monday. Air Canada suspended Puerto Vallarta operations. Most domestic and international flights canceled from Guadalajara and Puerto Vallarta airports. Schools in Jalisco and Nayarit closed Monday.
• President Sheinbaum called for calm, praised security forces, and said activities proceed normally in most of the country. Jalisco Governor Pablo Lemus activated “red code,” suspended public transport, and told residents to stay home.
• Markets: IPC closed at 71,436.55 (+0.83%) on Friday, before El Mencho’s killing. Monday’s session will be the first to price in the security crisis.

Why It Matters

Oseguera’s death eliminates one of the most powerful drug lords since El Chapo Guzmán. Under his leadership, CJNG became Mexico’s most powerful cartel—a diversified criminal enterprise spanning fentanyl, cocaine, methamphetamine, fuel theft, extortion, and human smuggling, with a presence in all 50 U.S. states. The DEA considered CJNG equal to the Sinaloa cartel. The Trump administration designated it a foreign terrorist organization in February 2025.

But the raid validates Sheinbaum’s critics and her own prior reservations. She has publicly criticized the “kingpin strategy” that decapitates cartels only to trigger power vacuums. No obvious successor exists: Oseguera’s brother, son (“El Menchito”), and daughter are all in U.S. prisons. Regional bosses may now fight for control, as happened when El Chapo’s arrest sparked a civil war within the Sinaloa cartel.

The timing is explosive on multiple fronts. Guadalajara is a 2026 World Cup host city, with matches four months away. The USMCA review hangs over bilateral relations. Sheinbaum is under relentless Trump administration pressure to demonstrate results against drug trafficking. This operation delivers that result—but at the cost of national instability that the U.S. itself will now cite as evidence of Mexico’s fragility.

RISK: CRITICAL

Brazil

Lula and Lee Elevate Brazil–South Korea Ties to Strategic Partnership; 10 MOUs Signed Spanning Minerals, AI, Defence, and Agriculture

What Happened

• Lula arrived in Seoul Saturday for a three-day state visit—his first to South Korea in 21 years—at the invitation of President Lee Jae Myung. Summit talks held Monday at Cheong Wa Dae (Blue House) in the first large-scale official welcome ceremony since Lee moved his office back to the presidential residence.
• The two leaders agreed to upgrade the bilateral relationship to a “strategic partnership” and adopted a 2026–2029 Action Plan setting priorities across trade, cultural content, aviation, digital economy, and energy transition. Ten memorandums of understanding were signed covering critical minerals, AI, defence-space-aviation, agriculture, health and biotech, SME exchanges, and joint cybercrime policing.
• Lee called for the prompt resumption of Korea–Mercosur trade negotiations, which Lula endorsed as “an urgent task.” Brazil is South Korea’s largest trading partner in South America. Lula highlighted Brazil’s rare-earth reserves and nickel deposits, seeking South Korean investment in mining and processing.
• Lee publicly praised Lula’s life story, noting both leaders shared experiences as former child factory workers. The personal rapport reinforces a symbolic alignment built on two G20/G7 sideline meetings in 2025.
• The visit caps an eight-day Asia tour that included the India AI Impact Summit and a bilateral with PM Modi (covered in Saturday’s edition). It is the largest Brazilian diplomatic delegation ever sent abroad: 11 ministers, 300+ business leaders, 50 CEOs.
• Markets: Ibovespa closed at 190,534.42 (+1.06%) on Friday—near all-time highs. The real and equities continue to benefit from Lula’s diplomatic momentum.

Why It Matters

The strategic partnership is more than a diplomatic upgrade. With Trump’s tariff regime reshaping global trade and the Supreme Court striking down emergency tariffs Friday, middle powers like Brazil and South Korea are accelerating hedging strategies. South Korea is a manufacturing powerhouse heavily reliant on imported raw materials; Brazil holds critical reserves of rare earths and nickel essential to EV batteries, renewables, and high-tech manufacturing.

For Brazil, the economic logic is clear: diversify beyond commodity exports and attract Korean investment into processing and downstream industries. For South Korea, the partnership helps reduce exposure to concentrated supply chains dominated by China. Both leaders framed the agreements within a broader narrative of democratic resilience and rules-based order—language designed to contrast with great-power coercion without explicitly naming either Washington or Beijing.

Domestically, the tour serves Lula ahead of October elections after mixed domestic signals. A state banquet Monday evening will feature Brazilian bossa nova performed by a Korean jazz band—cultural diplomacy that reinforces Lula’s image as Brazil’s global statesman.

RISK: ELEVATED

Peru

Balcázar Names Hernando de Soto Prime Minister; Cabinet Swearing-In Tuesday; Former President Castillo Requests Pardon

What Happened

• President Balcázar announced Saturday that internationally renowned economist Hernando de Soto will serve as President of the Council of Ministers (Prime Minister) during the transitional government. The palace confirmed the full cabinet will be sworn in Tuesday, February 24.
• De Soto, famous globally for his work on property rights, economic formalization, and inclusive development, brings immediate international credibility to an administration otherwise defined by Balcázar’s controversial legal history. The appointment is framed as reinforcing institutional stability and guaranteeing clean elections on April 12.
• Separately, former President Pedro Castillo—serving an 11-year sentence for rebellion after his failed 2022 attempt to dissolve Congress—has formally requested a presidential pardon from Balcázar. Castillo’s former defence minister delivered the petition to the presidential office. Balcázar was one of Castillo’s most visible congressional defenders during his presidency.
• Balcázar’s own trial for alleged misappropriation of approximately $600,000 from the Lambayeque Bar Association continues. The first hearing is scheduled June 16. A judge warned that failure to appear could result in a nationwide arrest warrant against the sitting president.
• Markets: COLCAP closed at 2,417.81 (+1.32%) on Friday. Peru’s commodity-driven economy, credible central bank, and 32% debt-to-GDP ratio continue to insulate markets from political turbulence. The April 12 election has 34 candidates; López Aliaga leads polls.

Why It Matters

Naming de Soto is Balcázar’s strongest move to project competence and reassure both domestic elites and international observers. De Soto’s global reputation—particularly with the international financial community and Washington policy circles—signals that the transitional government prioritizes economic continuity and election integrity over ideological adventurism.

The Castillo pardon request, however, introduces a political grenade. Granting it would infuriate Congress and the right, potentially triggering removal proceedings against Balcázar himself. Refusing risks alienating the leftist bloc that elected him. Every decision during the next 48 days will be read through Peru’s relentless electoral lens, constraining any ambitious policy moves.

RISK: HIGH

Regional Snapshot

Argentina: Senate committees on Labour Legislation and Budget meet today to begin reviewing the Deputies’ amended labor reform bill, with a floor vote targeted for February 27—one day before extraordinary sessions expire and two days before Milei’s March 1 state-of-the-nation speech. The government broadened RIGI investment incentive benefits for oil and gas over the weekend, extending the regime to 2027 and lowering the minimum threshold for onshore projects to $600 million. Separately, Milei rejected reports that Argentina was negotiating to receive U.S. deportees from third countries. MERVAL closed at 2,873,248.32 (+1.20%, Fri).

Chile: Markets reopen Monday after Friday’s U.S. visa sanctions on Transport Minister Muñoz and two officials over the Chinese-linked undersea cable project. IPSA reaction will be the first test of how investors price in the diplomatic rupture. Secretary Rubio is expected to attend Kast’s inauguration March 11—now 16 days out. Kast’s “Border Shield” immigration plan promises a 3,000-strong force to control the northern border starting on inauguration day. IPSA closed at 10,855.08 (+0.42%, Fri).

Colombia: March 8 legislative elections and presidential primaries are 13 days out. Three coalition primaries will narrow the presidential field: the right’s Gran Consulta por Colombia (nine candidates), the left’s Frente por la Vida (five candidates, without frontrunner Iván Cepeda), and the centrist Consulta de las Soluciones (two candidates). Neither of the two overall frontrunners—Cepeda and Abelardo de la Espriella—are participating in primaries. At least 61 political leaders killed during the campaign; 130 municipalities at extreme risk. COLCAP closed at 2,417.81 (+1.32%, Fri).

Cuba: The energy deficit reached 1,658 MW during peak hours Sunday, with the grid unable to meet roughly half of demand. Blackouts continue across the island. Cuba’s structural energy crisis has deepened since the U.S. oil blockade cut off Venezuelan supplies in January. Schools and workplaces have scaled back operations. Aeroflot’s last scheduled Cuba service departs Monday, February 24. The Nuestra América Flotilla continues planning to challenge the U.S. blockade by reaching Havana on March 21.

Venezuela: The amnesty law approved February 19 continues implementation. As of mid-February, over 600 political prisoners had been released according to the Rodríguez government, with independent monitors counting 444 confirmed through February 17. Human Rights Watch called on Venezuelan authorities to reform judicial and electoral institutions, warning that prisoner releases alone do not constitute genuine transition. Delcy Rodríguez announced the shutdown of El Helicoide prison.

Panama: CK Hutchison’s call for roundtable negotiations on Balboa and Cristóbal ports remains unanswered. ICC arbitration proceedings in Paris continue. Meanwhile, the 2026 World Cup logistics spotlight now falls on Guadalajara’s security situation following El Mencho’s killing—Panama’s Daríen migration corridor may see shifts if Venezuelan returnee flows change under Rodríguez’s transitional government.

Markets at a Glance

Source: TradingView (Tier 0) for Ibovespa, MERVAL, IPC, COLCAP, IPSA — charts provided by editor Feb 23. S&P 500 from FRED/St. Louis Fed. All equity figures reflect Friday, February 20, 2026 closing sessions. Monday sessions will be the first to price in the El Mencho killing and related security developments.

The Week Ahead

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