The U.S. government is escalating its response to Mexico’s energy policies under President Andrés Manuel López Obrador, alleging violation of the United States-Mexico-Canada Agreement (USMCA) and discriminatory treatment of U.S. energy companies.

U.S. Trade Representative (USTR) Katherine Tai said Monday that her office is requesting dispute settlement consultations with Mexico under the free trade pact, citing unfair treatment of U.S. firms in sectors including natural gas, power generation and marketing of liquid fuels.

The policies mentioned include a June 2022 directive from Mexico energy ministry Sener that would require natural gas marketers and large consumers to source the fuel from either national oil company Petróleos Mexicanos (Pemex) or state power company...