Couple of thoughts:
First, isn’t it illegal in the US to sell firearms to those in the country illegally? For that matter, I’m not sure of the law on selling to those here legally...
Second - if this guy was selling (knowingly) to illegals who were engaged in this battle in Mexico... then ship him to Mexico and let them deal with the problem.
But don’t start throwing laws around that will only actually affect law-abiding citizens of the US.
Also, if a person walks in the door and produces a valid (looking at least) picture ID and passes a background check the dealer has to sell him/her the weapons they choose. If the dealer refuses to sell on the basis that the customer looks like (Mexican) drug cartel folks the gun dealer will quickly find themselves right smack in the middle of a discrimination lawsuit.
If Americans don't like that then they need to change the laws.