Donald Trump announced that the US will impose a 25 per cent tariff on all imports from any country that buys oil from Venezuela. This move could potentially disrupt crude markets and significantly increase levies on goods from China and India.
Trump made the announcement on Monday, just days before revealing a new tariff regime on US trading partners. This decision adds to the chaotic trade policy rollout characterized by reversals and U-turns.
In a post on Truth Social, Trump cited various reasons for imposing the tariff, accusing Venezuela of sending criminals, including murderers, to the US undercover. Venezuela exported 660,000 barrels a day of crude globally last year, with top buyers like China, India, Spain, and Italy.
Trump later confirmed in a press conference that the 25 per cent tariffs on buyers of Venezuelan crude would be in addition to any existing tariffs.
The US sourced about 230,000 b/d from Venezuela in 2024, making it the nation’s fourth-largest supplier last year.
This escalation of Trump’s trade war follows an agreement between Caracas and the US to repatriate migrants and risks disrupting the oil market, potentially raising petrol prices. Brent crude prices rose 1.3 per cent following the announcement.
The president referred to the move as a “secondary tariff,” with an effective date of April 2, dubbed “liberation day,” when reciprocal tariffs on other countries will also be implemented.
Analysts predict that countries are likely to reduce imports rather than risk facing the new tariffs. The US Treasury recently revoked Chevron’s license to operate in Venezuela and extended the deadline for winding down operations in the country.
As part of the agreement with the US, Venezuela has begun accepting deportees, including alleged gang members. Trump’s recent efforts to deport these individuals aim to address Venezuela’s hostility towards the US and its values.
