By classifying these drug cartels as terrorists it allows the US to use the full power of NSA to prosecute this war. The military doesn't need to go through the DOJ to get warrants, and so all the people bought by the Cartels and the CCP to warn them when warrants are issued are useless. Think of what a powerful tool that is when you add it to the Coast Guard, US Navy, Air Force, Homeland Security, DEA, Police, SWAT, etc. If you have CI, that is great, but if you have an organizational chart of the Cartel, or of the Chinese companies supplying the drugs, that is all the NSA needs to completely get all the information necessary.
Also, these cartels will not be used to this, they will think there is a rat and become paranoid and turn on one another.