President Joe Biden’s administration has asked U.S. energy companies to prepare affidavits documenting how Mexico’s protectionist policies disrupted their investments as Washington prepares to escalate a trade dispute with its neighbor, according to three people familiar with the discussions.

Biden Administration Moving to Escalate Energy Trade Dispute With Mexico

Mexico President Andres Manuel Lopez Obrador’s steps to roll back reforms aimed at opening Mexico’s power and oil markets to foreign competitors ultimately sparked the trade dispute.

U.S. energy and power companies, such as Chevron and Marathon Petroleum, which sought to expand in Mexico, have complained that they have been denied simple permits and applications in decisions that favored state oil company Petroleos Mexicanos and national power utility Comision Federal de Electricidad.

The United States is likely to seek a dispute panel before the end of the year if talks on the issue continue to stall, and the affidavits represent evidence that would be included in the panel request, the sources said.

If that panel rules against Mexico and it fails to take corrective action, Washington could ultimately impose billions of dollars in retaliatory tariffs on Mexican goods.