Can North America rise above its differences to challenge China's growing energy dominance? The clock is ticking, as the United States-Mexico-Canada Agreement (USMCA) faces a critical review in 2026, a decision that could reshape global energy markets. While political tensions simmer between the U.S., Mexico, and Canada, a surprising opportunity emerges: their shared strategic interests in energy far outweigh their disagreements. Imagine a scenario where these nations unite to bolster energy trade, ramp up production, and fortify local supply chains—a win-win-win situation. But here's the catch: Mexico holds the key to this transformation, and it won't be easy.
The Atlantic Council, a respected bipartisan think tank, highlights Mexico's pivotal role in a recent report (https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/forging-north-americas-energy-advantage-mexicos-pivotal-role/). Mexico's domestic priorities—expanding energy infrastructure, strengthening its electric vehicle and semiconductor sectors, and harnessing its mineral wealth—align perfectly with North America's broader energy goals. In a 14-page policy brief (https://www.atlanticcouncil.org/wp-content/uploads/2025/10/forging-the-north-american-advantage-Mexicos-role-in-strategic-energy-market-integration.pdf), the Council argues that North American cooperation is essential to counter China's tightening grip on global energy supply chains (https://oilprice.com/Energy/Energy-General/Chinas-Rising-Influence-in-Global-Energy-Markets.html). While the U.S., Mexico, and Canada have recently favored protectionist policies, China has quietly consolidated its energy dominance, particularly in emerging economies. To compete, North America must pivot toward convergence and collaboration.
But here's where it gets controversial: Despite high-profile disputes during the Trump era—think border walls and trade wars—the economies of these nations remain deeply intertwined (https://oilprice.com/Energy/Energy-General/US-Energy-Strategy-Hinges-on-Mexico.html, https://www.npr.org/2025/03/12/nx-s1-5325859/canadas-threat-to-hike-electricity-prices-highlights-u-s-reliance-on-imported-power). Smoothing over these tensions isn't just beneficial—it's strategically imperative. China's unmatched energy spending (https://oilprice.com/Energy/Energy-General/The-Rise-of-China-and-the-Future-of-Clean-Energy.html) and rapid expansion of energy influence seem insurmountable, but the Atlantic Council believes North America has the tools to challenge this dominance.
North America's energy abundance positions it as the world's leading energy exporter. The U.S. dominates LNG exports, Canada supplies critical oil and gas, and Mexico's emerging Pacific Coast LNG projects offer direct access to Asian markets. Together, they can provide democratic allies with alternatives to authoritarian energy suppliers, turning energy integration into a geopolitical asset. And this is the part most people miss: Mexico's ambitious energy plans, including President Claudia Sheinbaum's Plan Mexico, are central to this strategy. Mexico's untapped green energy potential (https://ember-energy.org/latest-insights/renewables-point-the-way-to-mexicos-energy-security/) and its role in nearshoring efforts make it indispensable for U.S. and Canadian goals of energy security and sovereignty.
However, here’s the provocative question: What if North America fails to unite? China is rapidly expanding its energy footprint in Latin America, and Mexico could become a strategic ally for Beijing. Isolating Mexico would push it eastward, with potentially catastrophic consequences for North American policy and economic goals. The Atlantic Council warns that keeping Mexico aligned with its northern neighbors is crucial for continental stability.
As we navigate this complex energy landscape, one thing is clear: North America's ability to challenge China's dominance hinges on unity and cooperation. But will they seize this opportunity, or let it slip away? What do you think? Is North American energy cooperation the key to countering China's rise, or is it too little, too late? Share your thoughts in the comments below.
By Haley Zaremba for Oilprice.com
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