US President Donald Trump on Monday said he would impose a 25 per cent tariff on countries that buy oil and gas from Venezuela, a punitive measure that could hit Asian markets including China and India, among others, and sow fresh global trade uncertainty.
"Venezuela has been very hostile to the United States and the Freedoms which we espouse," he wrote on his Truth Social network.
"Therefore, any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country."
The latest across-the-board 25 per cent levies targeting direct and indirect buyers of Venezuelan oil can take effect as soon as April 2, according to an order signed Monday by Trump.
According to Trump's order, the 25 per cent tariff expires a year after the last date that a country has imported Venezuelan oil -- or sooner if Washington decides so.
Trump's announcement comes as the deportation pipeline between the United States and Venezuela was suspended last month when he claimed Caracas had not lived up to a deal to quickly receive deported migrants. Venezuela subsequently said it would no longer accept the flights.
But Caracas said Saturday it had reached an agreement with Washington to resume repatriations after which nearly 200 Venezuelan citizens were deported from the United States via Honduras.
How It Will Affect India
The US President's action could hit China and India, with experts noting that Venezuela exports oil to both those countries and to the United States and Spain.
In December 2023 and January 2024, India was the top buyer of Venezuelan crude oil. In the first month, New Delhi imported approximately 191,600 barrels per day, which rose to over 254,000 in the following month. In January 2024, India was importing nearly half of Venezuela's total oil exports (almost 557,000 bpd for the month).
In 2024, India imported 22 million barrels of oil from Venezuela, which made up 1.5 per cent of the country's total crude oil purchases.
In February, Venezuela also exported some 500,000 barrels of oil per day to China and this figure was 240,000 barrels for the United States, according to a report by AFP.
Oil Prices Hit
Following Trump's announcement, oil prices gained 1 per cent on Monday. Brent crude futures rose 84 cents, or 1.2 per cent, to $73 a barrel, while US West Texas Intermediate crude was up 83 cents, or 1.2 per cent, at $69.11.
Price gains were capped, however, as the US gave oil producer Chevron until May 27 to wind down its oil operations and exports from Venezuela. Trump had initially given Chevron 30 days from March 4 to wind down that license.
The two moves taken together alleviate some pressure on Chevron while putting more pressure on other consumers of Venezuelan oil, though it is uncertain how the Trump administration will enforce the tariff.
Trump's Tariff Plans
Since returning to the White House in January, Trump has unleashed tariffs on US allies and foes alike, attempting to strong-arm both economic and diplomatic policy. The secretary of state, in consultation with other US agencies, is authorized to determine if the levy will be imposed.
Trump told reporters Monday that the 25 per cent tariff would be on top of existing rates. He has dubbed April 2 "Liberation Day" for the world's biggest economy, already promising reciprocal tariffs tailored to each trading partner in an effort to remedy practices that Washington deems unfair.
He earlier signalled sector-specific duties coming around the same day -- but the White House said Monday it might take a narrower approach.
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