Donald Trump has urged Mexico to forge energy partnerships with US companies during stalled trade negotiations, sparking concern in Mexico City. In a call with President Claudia Sheinbaum, Trump proposed deals similar to one with South Korea, where Seoul committed to $100bn in US energy purchases. The leaders discussed increasing Mexican imports of US natural gas, which currently supplies three-quarters of Mexico's demand.
Talks aim to reduce Mexico's trade surplus with the US. Since taking office, Trump has imposed global tariffs to cut the US deficit. While most Mexican goods enter the US tariff-free under the USMCA, Mexico seeks exemptions on autos, steel, and aluminium.
The energy push follows the US seizing Venezuelan oil reserves and Mexico's historical restrictions on private investment. Sheinbaum's administration, which prioritizes state control via Pemex and CFE, is cautiously exploring private investment and fracking amid declining oil production and grid instability. Planned trade talks were postponed, partly due to the energy demands.
US Trade Representative Jamieson Greer and Mexico's Marcelo Ebrard recently met at the G20, with both sides describing talks as positive. The US-Mexico-Canada Agreement remains in uncertain annual review, with bilateral talks ongoing while Canada is excluded.
Source: Financial Times Companies · Summarized by HeadlinesBriefing