Can North America Unite Against China’s Energy Dominance?

The United States-Mexico-Canada Agreement (USMCA) is up for review in 2026, and the resulting policy outcome could have transformational importance for global energy markets and value chains. Even though it would seem that the United States, Mexico, and Canada are in an era of increasing political tension and division, the common strategic priorities of the North American bloc far overshadow the divergences and competing interests. Strengthening energy trade and mutual support to ramp up energy production and localized energy and manufacturing supply chains would be a win-win-win for all three parties, but will require a particularly heavy lift on the part of Mexico.

“Within this trilateral relationship,” reports the Atlantic Council, “Mexico’s role in particular could lean into its domestic priorities to expand energy infrastructure, strengthen its electric vehicle and semiconductor sectors, and develop its mineral wealth.”

The Atlantic Council, a longstanding bipartisan think tank dedicated to issues of international coordination and security, recently released a 14-page policy brief arguing for enhanced cooperation between North American nations in order to be able to compete with China in global energy value chains. As Mexico, Canada, and the United States have prioritized protectionist policies and fractured nationalism over the last decade, China has increasingly consolidated global supply chains and currently exerts a great deal of control over international energy markets, especially in emerging economies. The Atlantic Council argues that counteracting this precarious consolidation will require a course correction and a return to convergence, coordination, and cooperation on the part of North American nations, who will stand stronger together than divided in a rapidly changing global market.

While the governments of the U.S., Mexico, and Canada have had loud and contentious tiffs against the backdrop of the Trump administrations (see: 51st state, wall) the three economies remain highly dependent on each other, and politically entangled in inextricable and bilateral ways. Smoothing over trade tensions in light of those dependencies is therefore strongly in the nations’ favor.

Although China is unmatched in terms of energy spending and its rapid expansion of energy influence, supply chains, and investment into energy assets in emerging economies, the Atlantic Council argues that North America is well-positioned to challenge China’s runaway dominance if it can play to its historic strengths.