Donald Trump and the New Energy Policy

Donald Trump’s election as president could reshape the United States' commitment to international climate agreements, particularly the Paris Agreement. During his first presidential term, Trump formally withdrew the country from the agreement, arguing it imposed unfair costs on the US economy. Although Joe Biden’s administration reinstated the United States into the agreement, a second Trump term could mean another withdrawal or a significant reduction of the country’s climate ambitions. This would have global implications, as the United States is the world’s second-largest CO₂ emitter and its disinterest in leading the energy transition could slow progress toward global goals of keeping warming below 1.5°C by the end of the century.

Even before starting his presidential career, Trump was a strong advocate of the fossil fuel industry. During his previous administration, he eliminated key environmental regulations like the Clean Power Plan and approved projects such as the Keystone XL pipeline. He also promoted oil and gas extraction through deregulation and subsidies, prioritizing economic growth over environmental concerns. In 2019, the United States reached a historic record in oil production, surpassing 12 million barrels per day. Trump’s return to leadership could mean a revival of similar policies, reducing investments in renewable energy and reinforcing dependence on fossil fuels.

During his previous term, subsidies and support for renewable energy were minimal, and the Clean Power Plan, which aimed to reduce emissions in the power sector, was eliminated. In contrast, Biden's administration allocated billions of dollars to solar and wind energy projects under the Inflation Reduction Act. In 2022, renewables accounted for 22% of US electricity generation, with energy storage projects growing. A return to pro-fossil policies could slow this progress, affecting both the energy transition and the country’s competitiveness in the global renewables sector.

A less restrictive approach to vehicle emissions regulations could favor traditional gasoline car manufacturers while discouraging the shift to electric vehicles. During his previous term, Trump weakened fuel efficiency standards established by the Obama administration. This contrasts with the growing adoption of electric vehicles: In 2023, EV sales represented 7.2% of the US automotive market, up from 4.1% in 2021. Additionally, investment in electric charging infrastructure could decrease, hindering the goal of achieving a cleaner vehicle fleet by 2035.

Trump’s energy policy could also intensify liquefied natural gas (LNG) production, positioning the United States as a key competitor in the global market against Russia and other exporters, capitalizing on the current geopolitical situation caused by the Russia-Ukraine war. This increase in exports could strengthen alliances with Europe, which seeks to reduce its dependence on Russian gas. However, it might also divert attention from initiatives to decarbonize the energy sector.

If the federal government reduces its support for the energy transition, progressive states could intensify their efforts in response. A clear example is California, which has led initiatives to decarbonize its economy with goals such as achieving 100% carbon-free electricity by 2045 and banning the sale of new gasoline-powered vehicles by 2035. Private companies could also take a leading role, particularly multinationals committed to net-zero emission targets, facing a potentially hostile government view toward sustainability.

Another sector that may be affected by reduced federal support for research and development is technological innovation. This could delay advancements in developing tools for carbon capture and storage or green hydrogen production. If the United States decreases its investment in this sector, it could lose competitiveness to countries like China (which controls over 60% of global battery production) that view the energy transition as a strategic opportunity for economic development.

Regarding energy cooperation between Mexico and the United States, a fossil fuel-focused approach could destabilize and stall the progress made so far. This could complicate the integration of energy markets under the USMCA, affecting cross-border energy infrastructure projects. Additionally, it could reinforce Mexico’s dependence on hydrocarbons, contradicting its own climate goals. On the other hand, increased LNG exports from the United States could lower costs for Mexico, benefiting its economy in the short term but at the expense of greater environmental impact.

Overall, the outlook for the energy transition is uncertain. Trump’s second term as president of the United States could mark a shift in the country’s energy and climate policies, with far-reaching implications for the energy transition both nationally and globally. His focus on deregulation and support for the fossil fuel industry could slow recent advances in renewables, electromobility, and technological innovation, affecting US competitiveness in strategic sectors and the country’s ability to lead international efforts against climate change.

The energy transition is not only an environmental necessity but also an economic and strategic opportunity that will define nations’ leadership and sustainability efforts in the coming decades. The United States has the potential to be a driving force for change, but its path will depend on the political decisions made in the years ahead.