In a global landscape shaped by geopolitical tensions and environmental challenges, Pablo G. Strada, Senior Legal Director – International Trade at the Techint Group, and Lorena Tolaba, Legal Manager, examined how the United States and the European Union are taking distinct paths in the energy transition. They also reflected on China’s emergence as a technological leader and on the opportunities for Latin America to strengthen its place in global value chains.

How would you describe the current landscape of regulations driving the energy transition in the United States and the European Union?

Strada: Europe, which tends to be very attuned to social demands, has always taken a more hands-on approach: regulating, guiding, and supporting the private sector to move in the direction it wants, especially when it comes to energy policy and subsidies. Even if some activities aren’t profitable at first, Europe is willing to back them.

The United States, meanwhile, takes a much more Schumpeterian stance, what you might call a “creative destruction” approach: let the market lead, and step in later if things need adjusting. Under the current administration, we’ve seen a clear shift away from the previous government’s Inflation Reduction Act (IRA). Donald Trump has rolled back many EPA regulations, favoring a freer market and a more investment-driven model.

The government’s focus appears less on driving the energy transition—which is already in motion—and more on securing abundant energy from any source, whether coal, nuclear, or oil, while easing regulatory hurdles for private investment. So yes, we’re seeing a major divergence again, both in vision and in regulation. And that inevitably affects supply chains and industrial competitiveness: Europe tends to regulate in favor of consumers, while the U.S. focuses on enabling and protecting producers. That creates two very different sets of incentives for investment and production.

Tolaba: The United States has experienced sharp policy swings: during his first term, Trump pulled out of the Paris Agreement; Joe Biden later rejoined, and now they’ve withdrawn once more. This back-and-forth fuels investor uncertainty. The Inflation Reduction Act had set clear incentives for the transition, but today, energy policy has reverted to being driven by market forces. Meanwhile, the European Union has stayed the course, even through the turmoil caused by the Russia-Ukraine conflict, which pushed up energy prices and slowed parts of the process. In this setting, the U.S. has stepped back, easing global pressure to move toward comparable regulatory frameworks.

How much is the new Trump administration influencing changes in the approach to the energy transition?

Strada: There’s been a stark shift from the previous administration. Trump is working to dismantle much of what his predecessor put in place. The message is clear: fewer permits, fewer regulations, but strong encouragement for reshoring and rebuilding productive capacity within the U.S. It marks a turning point, not only in energy policy, but also in foreign affairs, immigration, and the economy.

The technological and political backdrop also matters. Energy demand from artificial intelligence and data centers is soaring. Trump argues that the U.S. cannot rely on intermittent sources like solar power, and is therefore promoting a return to nuclear energy and fossil fuels, prioritizing domestic production or that of allied nations.

The U.S. has shifted from being an uncontested global hegemon to a power challenged by China’s exponential rise, and it has no intention of conceding ground or risking dependency in the event of conflict. The new approach aims to reassert control over the entire supply chain, rebuilding both technological and industrial capacity. Now, companies seeking to avoid tariffs must invest within the U.S. It’s a model centered on self-sufficiency and local competitiveness, even at the cost of stepping back from renewable-energy commitments.

Tolaba: In Europe, change requires consensus among many countries and involves heavier bureaucracy, making sudden policy shifts impossible. By contrast, in the United States, a change in administration can lead to sweeping reversals, as seen with the rapid adjustments to the Inflation Reduction Act. As a single political entity, the U.S. operates differently. That’s why Europe maintains long-term frameworks—like the European Green Deal, the Emissions Trading System (ETS), and the Carbon Border Adjustment Mechanism (CBAM)—that are difficult to undo, while U.S. policy directions can swing sharply with each political cycle.

In terms of production, how does Trump’s approach to deregulation and the strict regulatory frameworks in force in the European Union affect European and American markets?

Tolaba: In Europe, energy and labor costs are typically higher, which undermines competitiveness: it often ends up being cheaper to import manufactured goods. The CBAM aims to protect domestic industries, but because it only covers certain sectors, such as steel and aluminum, it can inadvertently encourage the import of downstream manufactured products. Ultimately, it’s an internal debate, but Europe is choosing to uphold its climate goals even at the expense of industrial competitiveness.

Strada: Europe finds itself at a crossroads. It is producing less steel, fewer chemicals, and fewer cars, while Asia—led by China—continues to advance rapidly. This decline in output, coupled with the high costs of maintaining Europe’s regulatory framework, is taking a toll. In response, center-right parties are gaining ground in countries such as Germany and Poland, voicing frustration with what they see as excessive European Union bureaucracy.

International negotiations to establish a system of payments for CO₂ emissions in maritime transport recently collapsed. What are the implications of this for the global energy transition and for the competitiveness of countries and companies?

Strada: This situation clearly illustrates how politics and regulation can shape the course of global decarbonization. Shipping alone accounts for roughly 3% of global CO₂ emissions, and a binding framework of targets and payments could have spurred cleaner practices. Instead, the absence of an agreement—driven largely by the Trump administration’s position and its threats of economic and diplomatic retaliation—shows how difficult it is to align international actors.

The immediate consequence is a slowdown in the sector’s technological transition: many new ship orders are reverting to conventional engines rather than clean fuels, while investments in dual-fuel or alternative technologies are being delayed.

There’s also a broader strategic dilemma. Countries moving ahead independently with emissions reductions, such as the U.K. and Germany, bear high costs, while others, like China, continue to expand their emissions. This raises the question of whether unilateral action is worthwhile without a coordinated global framework. Europe’s CBAM tries to address this by setting clear standards for market access, but recent experience shows that global coordination remains a major hurdle.

In a context where Latin America still lacks such demanding regulatory frameworks, what opportunities and challenges lie ahead for the region, and how can it position itself in the global energy transition?

Strada: This context could actually be very favorable. Global value chains are being reconfigured, creating new opportunities for integration. The United States and Europe are trying to reduce their dependence on China and need new regional partners. Latin America—along with Mexico, Canada, and of course Argentina, with its mineral and energy resources—can play a key role. This reconfiguration also gives Latin American countries the chance to rebuild their supply chains, attract investment in strategic manufacturing, and reduce the risks of technological dependence.

Tolaba: I agree. The region also has more flexibility now. The pressure to adopt strict regulatory frameworks has eased, allowing governments to focus on productive development. In other words, if there’s a need to prioritize production and temporarily increase emissions in the short or medium term, there’s more room to do so. Although the region’s overall emissions are relatively low, there are still opportunities to expand exports without undertaking drastic transformations. At the same time, it’s possible to implement energy efficiency targets consistent with global trends, but without the burden of tight deadlines.

Strada: Exactly. We’ve gained time. The rollout of mechanisms such as local ETSs or carbon taxes—topics that were being actively discussed a few years ago—will likely be delayed. That gives us space to adapt gradually.

What role does China play in this regulatory and competitive environment?

Strada: China has positioned itself as the world’s main supplier of energy transition technologies: solar panels, batteries, and turbines. Its strategy has been straightforward: to prioritize production and industrial dominance while maintaining broad macro-level regulation, and with no intention of adhering to the kind of strict environmental standards seen in Europe. China has focused on expanding production, controlling the value chain, and developing technology, achieving both efficiency and scale.

Tolaba: Europe chose to lead the energy transition by protecting the environment and consumers, and by promoting sustainable production. China, on the other hand, centered on controlling and producing both technology and access to inputs. That difference largely explains today’s outcomes: Europe struggles with high costs and deindustrialization, while China has gained efficiency and scale, making it harder to compete with. Its drive toward cleaner energy is motivated more by public health concerns—particularly urban pollution—than by climate commitments. China modernized its industry without slowing growth and has stated it will continue increasing emissions until 2060.

Strada: In short, Europe regulates to protect the consumer; China regulates to support and empower the producer. And that distinction defines two entirely different economic and regulatory models.

Given these regulatory frameworks, what challenges face international companies, and how is the Group positioning itself in relation to upcoming opportunities and risks?

Strada: The nature of risk has shifted. In the past, the main concern was over-regulation and the constant pressure to report. That demand has now eased, and reporting is no longer the top priority. Today, the focus is geopolitical: tariffs, sanctions, and trade barriers that can emerge overnight. Companies must be strategic about where they invest and how they diversify risk.

I believe that for the Group, given its strong presence in Western economies, the current context is quite favorable. The global push to rebuild local supply chains is creating new opportunities across steel, construction, and the energy transition. Decarbonization targets remain in place, but with less immediate regulatory pressure. The emphasis now lies on efficiency and competitiveness rather than the cost of compliance.

Are these regulatory frameworks creating a level playing field or greater fragmentation between regions? What should companies consider in order to anticipate upcoming changes?

Strada: If the world, and its regulatory frameworks, continues to fragment, and value chains are reorganized with less dependence on China, opportunities for Latin America will expand. Geopolitics influences positioning strategies, and if the global economy moves toward a kind of “decoupling” from China, Latin America can strengthen its role in value chains and industrialization. Companies will need to adapt to multiple regulatory regimes, but they will also gain more influence in shaping them, especially in strategic industrial sectors. Argentina, for instance, produces nuclear energy, one of the few countries in the region to do so, and it could play a part in future decision-making. Industrial policy is now centered on steel and manufacturing, which presents real opportunities for the Group. The shift in direction is already a positive sign.

Tolaba: That’s consistent with what we’ve been seeing: the goals of the energy transition and decarbonization will remain on the global agenda, but with less pressure to absorb immediate costs. This creates space to plan investments and production with a focus on efficiency rather than purely regulatory compliance.