Will Trump's Tariffs on Venezuelan Oil Matter?
The latest tariffs appear to be like many before that were promised but never enacted.
After setting April 2 as the day that tariffs on most global goods will go into effect, the White House appears to be walking back its plans. Levies on products like lumber, automobiles, and semiconductors may not be enacted until an unspecified later date, reports The Wall Street Journal. Other unspecified countries may be exempt entirely, President Donald Trump told reporters on Monday.
One that won't be exempt from the Trump trade war, at least for now, is Venezuela. On Monday, the president signed an executive order imposing retaliatory tariffs on Venezuela for the government's alleged aiding and abetting of the Tren de Aragua gang. Beginning April 2, any goods imported to the United States from a country that directly or indirectly imports Venezuelan oil may be subject to a 25 percent tariff. The order authorizes the secretary of state to impose the levy, which will expire a year "after the last date on which the country imported Venezuelan oil," at his discretion.
Venezuela is the world's 20th-largest producer of crude oil and plays an important role in providing petroleum products to several countries, including Spain, India, and Russia. The U.S., too, relies on Venezuelan oil imports, bringing in an average of 232,000 barrels of crude oil and petroleum products per day from the country in 2024. (This is about 3 percent of total daily crude imports to America.)
While these tariffs could impact the energy supply of some countries, Muyu Xu, senior crude oil analyst at analytics firm Kpler in Singapore, tells Bloomberg she believes "Trump's order is primarily aimed at Venezuela—cutting off its economic ties to the global market and pressuring it to come to the negotiating table with the U.S."
The move could also be a targeted attack on China, which is a major purchaser of Venezuelan crude oil.
After the U.S. imposed sanctions on Venezuela's state-owned oil company in 2019, China officially stopped importing crude from the nation. "Unofficially, the world's top crude importer never stopped its purchases, with Venezuelan oil often being masked as bitumen mix, according to traders and third-party data providers," reports Bloomberg.
If imposed, the levy would likely not have a large impact on China's oil sector—the country gets most of its crude from Russia, Saudi Arabia, and Iraq—but it could deal a blow to Chinese refineries, which have been struggling due to higher costs and slow economic growth.
Since Trump took office in January, the U.S. and China have targeted each other's respective energy sectors. In February, China implemented a 15 percent import fee on American liquefied natural gas. Last week, the U.S. issued sanctions on a Chinese teapot refinery—which are smaller, privately owned, and operate outside of the U.S. financial system—for receiving $500 million worth of Iranian oil, some of which was under U.S. sanctions. This was the first time that the U.S. sanctioned a Chinese teapot refinery, according to Energy Intelligence, an energy information company. Separately, the U.S. also sanctioned a Chinese crude oil terminal for transporting Iranian crude last week.
These sanctions are unlikely to stop the transfer of sanctioned Iranian crude to China. Energy companies can implement workarounds like "ship-to-ship transfers in waters off peninsular Malaysia," Bloomberg points out.
Similarly, these tariffs will probably not halt Venezuela's oil exports. Countries can easily avoid Venezuela-related tariffs by altering data and lying about sourcing (which China has done for years). Unless the Trump administration is prepared to thoroughly enforce these duties, the latest tariffs appear to be like many of the measures before it that were promised but not enacted.
