Whisk tomato sauce, tomato paste, water, and vinegar in a small saucepan.
Stir in chili powder, cumin, paprika, garlic powder, onion powder, oregano, sugar, salt, pepper, and cayenne.
Bring to a gentle simmer over medium heat. Cook 6–8 minutes, stirring often, until slightly thickened.
Taste and adjust seasoning. Add a splash of vinegar for tang or a pinch of sugar for balance.
Cool 5 minutes. Serve warm or chill until cold for the best flavor.