In an unprecedented step, the United States has placed new economic sanctions on Venezuela. These sanctions have been aimed at the oil sector, which has long been the bedrock of the South American country’s economy. This move, revealed by President Donald Trump yesterday, takes place during increasing aggression between the two countries. Venezuela has become the US’s poster child for “very hostile.” As a result, Chevron Corp. is currently free to pump and export oil until May 27. Combined with other recently proposed measures, this announcement marks a significant shift in global trade dynamics. It increases tariffs on steel and aluminum imports to 25%.
Additionally, the new measures have important implications for countries importing oil from Venezuela. Beginning April 2, these countries will be subject to tariffs on all their trade with the U.S. This decision will have a huge impact on the biggest importers such as Spain, India, Russia, Singapore and Vietnam. They now find themselves contending with the often confusing terrain of US-Venezuelan relations.
The US has historically been the largest single buyer of Venezuelan oil, even as the Trump administration instituted harsh sanctions on the country in 2019. In January, the US imported an average of 8.6 million barrels of oil from Venezuela. This helped add up to nearly 202 million barrels imported overall during that month. It can be an incredibly stressful relationship. Millions of Venezuelans have left their country in recent years under the regime of President Nicolás Maduro, seeking refuge from political upheaval, economic collapse, and acute shortages of vital resources including food, pharmaceuticals, and power.
Besides going after the oil sector, the US has rolled out other new sanctions against Caracas. These steps, like raising the bounty on President Maduro’s head to $25 million, are long overdue. The US has imposed a "secondary" tariff over Venezuela. This move comes in response to Venezuela’s recently revealed ties to the neo-colonial criminal gang Tren de Aragua.
The decision to impose tariffs on Venezuelan oil imports follows a longer-term trend in US trade policy. The Trump administration has already imposed, or promised to impose, new tariffs on autos, pharmaceutical drugs, lumber, computer chips and copper. Together this strategy seeks to respond to multiple economic crises and safeguard American industries.
China—who already in 2023 has bought 68% of all oil exported by Venezuela—has its own hurdles to overcome as well. The US has taken this kind of action already through universal 20% import tariffs on Chinese imports to fight the illegal trade in fentanyl. A new 25% import tax would only continue the downward trajectory of US-China relations and worsen tensions that started with unilateral tariffs.
President Trump touted his administration’s use of tariffs as a tool to accomplish economic goals during a recent speech at the NATO summit.
"This investment is a clear demonstration that tariffs very strongly work," said President Donald Trump.
The international community are understandably concerned as these reassuring words crumble into reality. The threat of new and higher tariffs on hundreds of billions of additional goods is an extraordinary risk to the global rules-based trading system. For countries that are dependent on Venezuelan oil, the new economic landscape puts accelerated choices in front of them.
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