Energy has become the primary battleground of a rapidly shifting geoeconomic order, in which Donald Trump’s mercantilist strategy for the US, competition with China and Europe’s uncertainty are reshaping rules, incentives and risks for companies and producer countries alike. By 2025, this transformation had reached a critical phase: the green transition is moving forward, but within a world that is more fragmented, more protectionist, and more willing to use energy, currencies, and technologies as levers of national power.

 

 

The four pillars of the Trump Administration 

The Trump Administration’s economic strategy is based on four closely interconnected pillars: higher tariffs, pressure for reshoring and friend-shoring strategic production, selective use of global value chains as a bargaining chip, and the redistribution of resources to finance Atlantic defense and security (NATO) policies.

Tariffs differentiated by country and sector, even including an across-the-board levy on imports, are presented as a response to trade asymmetries and become “tariff weapons” used to redefine power relations and alliances beyond traditional multilateral schemes. These maneuvers foreshadow a more concrete and less legally constrained negotiating stance—a framework that also involves security, arms and energy.

So, this approach does not seek to rebuild the old free trade, but to build “conditional” trade, where access to the US market is tied to national security objectives, industrial policy and technology control. In this view, value chains are no longer neutral infrastructures of the global economy, but devices to be redesigned to reduce dependence on strategic competitors and maximize the ability to pressure partners and suppliers.

Trumpian mercantilism reinforces—albeit perhaps unintentionally given the White House’s underlying interest, which is to devalue its currency—the role of the dollar not only as a reserve currency but also as the true geopolitical infrastructure of the economic order. Tightening tariffs and regulatory uncertainty are pushing capital towards American assets perceived as safe havens, supporting dollar demand and bolstering Washington’s ability to influence global financial conditions, especially for countries with significant debt in US currency.

 

 

At the same time, the centrality of the dollar makes the use of financial sanctions and restrictions on access to international payment systems more effective, turning energy and trade finance into a terrain of “armed interdependence.” For energy players—from hydrocarbon producers to big investors in renewables—this means operating in an environment where the risk of sudden financial or trade measures becomes a significant factor in business models and capital allocation choices. And where the intentions of political power are not exactly matched by the expected effects but often result in paradoxical solutions. At present, in fact, there is neither a depreciation of the dollar, as the new American political elites would like, nor the emergence—often predicted by anti-system theorists elsewhere in the world—of a viable alternative to the dollar’s central role in the international monetary order.

 

 

US competition with China

Central to this junction between fault lines is once again political competition on a global scale. The relationship between the US and China remains the fulcrum of the new global balance, with technological and energy dominance at stake. On the one hand, Washington aims to contain China’s rise through investment controls, restrictions on exports of advanced technologies, and tariffs on products considered critical, from batteries to solar panels; on the other, China seeks to strengthen its energy autonomy by increasing renewables capacity, but also by maintaining significant investments in coal for domestic supply security.

This competition is reflected in green transition value chains, where China maintains a dominant position in everything from photovoltaics and batteries to wind components, while the United States pushes tax incentives and subsidies to strengthen domestic manufacturing capacity or attract investment from allied countries. Intermediary players—from Asian technology-exporting economies to oil and gas producers in the Middle East—have to juggle outlet markets, regulatory constraints, and risks of forced alignment while trying not to get squashed between the two great powers. 

 

 

From the European point of view

For Europe, this scenario translates into twofold pressure: on the one hand, the United States is demanding alignment on policies toward China and Russia; on the other hand, China remains a crucial economic partner, especially for technologies and components needed for the energy transition. Efforts to build European “strategic autonomy” come up against strong national differences on defense, trade and industrial policies, making it hard to develop a common line on “green” tariffs, investment screening and policies to support energy supply chains.

The war in Ukraine and the rapid disengagement from Russian gas have shown both Europe’s vulnerability and its ability to respond by strengthening interconnections, storage, and imports of LNG, but at the price of increased dependence on extra-EU suppliers and foreign technologies. Meanwhile, the politicization of supply chains for renewables, grids, and batteries exposes the continent to the risk that choices over tariffs, incentives, and standards could become new sources of friction among member states precisely along the three key axes of energy, trade, and security.

 

 

 

The transition to a low-carbon system

Despite geopolitical tensions, the energy scenarios for 2026 converge on a few points: electricity demand is growing faster than global GDP, driven by digitalization, data centers and electrification of end-use consumption, while renewables are driving the increase in supply but with large disparities among regions. The transition to a low-carbon system continues, buoyed by falling costs for clean technologies and climate commitments, but slowed by infrastructure hurdles, legal uncertainty, and new trade barriers that affect the very supply chains that yield decarbonization. This slowdown in green policies also includes the opposition of a significant portion of public opinion, which translates into political resistance, especially in Europe. The Green Deal has been perceived by the majority of citizens as excessively interventionist and punitive from a fiscal and regulatory standpoint, not to mention its negative consequences on employment and production in the European automotive sector. All this will not lead to the elimination of the ecological transition, as investments remain substantial and long-term oriented, but it will lead to an adjustment of policies.

The consequence is an energy mix where fossil fuels remain central, with particular resilience for natural gas and, in some scenarios, coal, while political and social pressures grow to accelerate the phase-out of high-carbon sources. The importance of nuclear energy is also increasing compared to the past, given its strategic relevance to the ecological transition, along with technological research into small modular reactors and, of course, nuclear fusion as a possible breakthrough for the future. The challenge for governments and companies is to reconcile energy transition, scientific research and industrial competitiveness.

For oil and gas producing countries, the new framework represents both a threat and an opportunity. On the one hand, the prospect of more uncertain demand after 2030 and the acceleration of the transition in some regions force reflection on economic diversification and the ability to attract investment in a world more sensitive to climate risk; on the other hand, geopolitical volatility and supply tensions may maintain the strategic value of hydrocarbons for many years, if not decades.

Some producers aim to strengthen their role by investing in refining, petrochemical, and LNG capacity, as well as in large hydrogen and renewable projects, to remain relevant in the new energy value chains. Those who fail to reposition, on the other hand, risk gradually losing political and fiscal leverage, especially if international finance continues to shift toward assets compatible with the energy transition and technological progress.

In 2025, the convergence of energy transition, trade protectionism, and major power rivalries is transforming energy into a sensitive indicator of new global balances. The combination of high price volatility, tensions in clean technology supply chains, and the return of protectionism make for a riskier environment. This context requires conceptual and technical tools, and scenario interpretation capabilities, far beyond those of the past, for both policymakers and the business community.

For energy companies, this means rethinking strategies and business models along three lines: diversification of sources and geographies of supply, also supported by government policy; integration of physical assets with data and risk management capabilities; and active participation in redefining the rules and standards that will govern the new energy geoeconomy. Those who can successfully navigate this hybrid space between market and geopolitics will not only ensure business continuity but also help define who will lead the transformation of the global economy in the coming decades.