Energy Industry Prepares for Changes Under Trump’s Administration

On Jan. 20, 2025, Donald Trump was sworn in as the 47th President of the United States, marking the beginning of a presidency poised to significantly reshape the energy sector. In his inaugural address, Trump reaffirmed his commitment to revitalizing domestic energy production, prioritizing oil and gas, and reducing regulatory barriers to achieve "American energy dominance."

On his first day in office, President Trump stated his intent to declare a national energy emergency, aiming to streamline permits for energy projects, open new areas for exploration, and roll back environmental regulations. These measures are intended to increase domestic oil and gas production while addressing what the administration perceives as undue constraints on energy development.

The US government also announced its plan for the United States to withdraw once again from the Paris Climate Accord, underscoring a departure from international climate commitments in favor of policies that prioritize economic growth and energy independence.

Regarding tariffs, President Trump had previously revealed plans to impose a 25% tariff on all imports from Mexico and Canada, citing concerns over illegal immigration and drug trafficking. While analysts are skeptical about tariffs targeting energy commodities due to the interdependence of North American energy markets, such measures could strain relationships with key trade partners. Mexico and Canada are vital suppliers of energy-related goods, contributing 9.3% and 48.5%, respectively, to US energy imports in 2023. Mexican President Claudia Sheinbaum criticized the tariff proposal, warning of potential retaliatory measures that could disrupt economic and energy trade. Canadian officials echoed these concerns, emphasizing their critical role in US energy security.

Trump’s pro-energy policies, including accelerated liquefied natural gas (LNG) infrastructure development, could expand US LNG export capacity from 11.3Bcfd in 2023 to 22.4Bcfd by 2030. For Mexico, the increased availability of US LNG presents opportunities to enhance energy security but also risks of market oversupply affecting price stability. However, tariffs and shifts in US energy policies could challenge Mexico's energy strategy, especially given its reliance on US natural gas imports. Retaliatory tariffs could further complicate the situation, potentially impacting shared energy infrastructure and trade flows.

Moreover, the USMCA energy dispute remains a focal point for North American trade relations. As USMCA renegotiations approach in 2026, Trump's nationalist agenda adds uncertainty to discussions, especially regarding Mexico's energy reforms and its disputes with US and Canadian investors. Increased Chinese investments in Mexico's automotive and energy sectors add further complexity to trilateral negotiations.

The energy industry's response to Trump’s policies has been mixed. Industry leaders have welcomed deregulation and expanded production opportunities, while environmental groups have voiced concerns about the long-term impacts on climate and sustainability. Economists note that global energy markets, beyond presidential policies, will play a critical role in shaping outcomes.