When a group is designated as a terrorist organisation in the US, it becomes illegal for people in the US to knowingly offer support.
Its members are also banned from entering the US. If they are already in the US, they face being deported.
If financial institutions discover they have funds connected to the group, they are required to block the money and alert the US Treasury Department.
Some analysts suggest that the designation could affect the supply of weapons to the cartels from the US.
Earlier this year a US government study traced more than 150,000 firearms including assault rifles back from Mexican criminals to gun shops and factories in the US.
Under anti-terror laws, those who purchase the guns in the US for the cartels could face much heavier penalties.
Other analysts suggest such a designation could complicate possible Mexican government negotiations with cartels as well as efforts by US agencies and NGOs to support peace moves.
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"History Is Much Like An Endless Waltz. The Three Beats Of War, Peace And Revolution Continue On Forever." - Gundam Wing: Endless Waltz