U.S. President Donald Trump has threatened to impose a 25% tariff on goods imported into the United States from countries that purchase oil from Venezuela. Trump described the move as a "secondary tariff" intended to punish the Latin American nation "for a number of reasons," including allegedly "deliberately" sending gang members to the U.S. This action underscores the administration's firm stance against certain international behaviors.
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03-25, 2025At the same time, Trump hinted that he was softening his plans to impose tariffs on goods imported from other countries, saying he "might give breaks to a lot of countries." These remarks appeared to confirm reports that he planned to announce a reduction in the scope of the taxes on April 2, causing markets to close higher. The market's positive response reflects investors' sensitivity to trade policy changes.
Previously, Trump had stated that he was seeking to impose "reciprocal" tariffs on countries around the world, outlining a system where "they charge us, we charge them." But on Monday, he suggested the White House might be "nicer" when it comes to new tariff rates and acknowledged that some countries might be exempt from the measures. He said, "We may charge less than they charge us, because they charge us too much, and I don't think they can afford it." This approach aims to address perceived trade imbalances.
After Trump issued the tariff threat, major U.S. stock indexes fell sharply in recent weeks, but all rose on Monday. The S&P 500 closed up 1.7%, the Dow Jones Industrial Average rose 1.2%, and the Nasdaq rose 2.2%. Tariffs are taxes levied on imported goods, paid by the American companies that buy the goods, not by the overseas businesses that sell the products. Therefore, the impact is primarily felt by domestic consumers and businesses.
Since taking office in January, Trump has repeatedly used tariffs or tariff threats to gain leverage in a range of disputes, only some of which are trade-related. He said on Monday that he still plans to impose tariffs on specific products, including cars, lumber, and computer chips, and claimed that the possibility of taking such measures has helped stimulate investment in the United States. His latest threat against Venezuela is expected to increase pressure on existing buyers of its oil, such as China, India, and Spain, prompting them to reduce their transactions with Venezuela, which provide the Venezuelan government with a vital financial lifeline. The international community is closely watching the impact of these measures.
Since February, Trump has raised tariffs on Chinese imports to at least 20%. He told reporters that he intends to add the latest announcement to existing tariffs. For Venezuela, China is a major buyer of its oil. But Venezuela is not a major source of crude oil for China, which imported more than 11 million barrels of crude oil per day last year. The United States is a major buyer of Venezuelan oil, as U.S. oil company Chevron has been granted waivers from economic sanctions. These waivers have allowed continued trade despite broader restrictions.
The Trump administration has previously stated its intention to end these exemptions. On Monday, the government updated the order, giving Chevron until May 27 to wind down its operations in Venezuela, extending the deadline by two months. Chevron declined to comment. Oil prices rose more than 1% after the news was announced. The extension suggests a gradual approach to phasing out U.S. involvement in the Venezuelan oil sector.
