Policy Alert: US Threatens Tariffs Against Any Country Importing Venezuelan Oil

Action: On March 24, the President issued an executive order permitting the imposition of tariffs, effective on or after April 2, of up to 25% on all goods originating from countries that import oil from Venezuela. The Order delegates authority to the Secretary of State to determine whether to impose the tariffs. The tariffs are set to expire after one year; however, they may be lifted earlier at the discretion of the Secretary of Commerce.

Key Insights

• In justifying the tariffs, the Order cites national security and humanitarian concerns, including the Maduro regime’s support for the US-designated terrorist group Tren de Aragua, its undermining of democratic institutions, economic mismanagement and public corruption, a deepening humanitarian and public health crisis in Venezuela, and its contributions to destabilizing the Western Hemisphere through the forced migration of millions of Venezuelans.
• The tariffs would be imposed in addition to existing sanctions imposed on Venezuela and other tariffs imposed on imports. According to 2023 data, China and the US were the largest importers of Venezuelan oil, accounting for 68% and 23% of exports, respectively. Spain, Cuba, Singapore, Malaysia, Russia, Vietnam, and the Bahamas were also importers of Venezuelan oil in 2023. Press reports citing more recent data indicate that India has also become a top importer of Venezuelan oil.
• It is unclear how aggressively the Administration will impose the tariffs as threats of potential retaliatory tariffs and geopolitical considerations may factor into the Administration’s decision making.
• The Order follows recent steps by the Administration to further isolate Venezuela’s oil industry, including directing Chevron to cease operating in the country by May 27.