President Donald Trump could trigger an "energy cold war" against Mexico due to the country's high dependence on U.S. natural gas, warned Santiago Villagómez, CEO of Energía Real. More than 50 percent of Mexico's energy matrix relies on natural gas from the United States, creating significant vulnerability in supply and could be used as a point of pressure by Trump.
In this regard, Villagómez pointed out the importance of funding investment projects in storage, as Mexico has only two to four days of natural gas inventory. Although the United States is already pressuring Canada in the energy sector, Mexico has not yet been severely affected, as it does not export energy to the U.S. market, except for direct energy imports to Baja California Norte from California.
In the case of Canada, Trump has imposed a 25 percent tariff on all products, but has created a special 10 percent tariff for imports of energy products. This is due to Canada's efforts to reduce its dependence on the United States. Products such as crude oil, natural gas, uranium, coal, and hydroelectric power, among others, will have to pay this special tariff to enter the U.S. market.
On the other hand, players in the Mexican electricity sector are worried about exchange rate volatility, gas prices, and the impact of tariffs on their clients given Trump's protectionist stance. Despite these concerns, Villagómez believes it is unlikely that investments in the energy sector will stop, as he does not see investors moving away from Mexico in the near future.
