President Donald Trump is now testing something new – “secondary tariff” – not only targeting Venezuela, but any country that dares to buy oil. If you are trading with Caracas, Trump wants to slap you with a 25 % tariff on your exports to the United States
This step, which was announced in fact and then made the official, is not just another political experience. It is a direct blow to Venezuela’s oil trade and any country that keeps it alive.
The declared reason? Trump claims that Venezuela sent “tens of thousands of high level and other criminals” in the United States, and he uses economic pressure to impose work. The United States has already has sanctions on Venezuela. This new idea takes things further – clarify other countries to work with them.
Trump pushes a new type of customs tariff
“This is a new concept in economic war,” He said Francisco Montalde, who runs the Energy Policy Program in Latin America at Rice University. “How can you be implemented? It is of course not clear.”
But Trump does not wait for clarity. It combines traditional customs tariffs with what is known as secondary sanctions – vocabulary for anyone who deals with a country that the United States is already enjoying under restrictions. In this case, the warning is intended for buyers of Venezuelan oil.
This not only aims at one or a country. Oil in Venezuela still arrives in Spain, India and the United States through companies such as Chevron, Rossepsol and accreditation – they all work under special licenses. Then there is China, which deals with a large part of the black market oil of Venezuela. This is what Trump really sees.
“China is the main actor that is directed to this because it is basically the Black market of Venezuelan oil,” Montalde added. “They will not have to do secondary definitions if it is not for China.”
Arranging the goals of China, includes Hong Kong and Macau
The executive order is the authority of Foreign Minister Marco Rubio starting April 2. He can decide whether a state of 25 % penalty should be hit to import Venezuelan oil. Whether it is directly or indirectly it does not matter.
The request does not list specific goals, but it shows one thing – do not get away with fate. The tariff does not apply, if it is operated, only on China but also on Hong Kong and Macau, and these are the only sites that have been named regardless of Venezuela.
“Sometimes definitions are seen as a form of punishment,” said Josh Lipsky of the Atlantic Council. “He believes, and it was clear in this matter since the campaign, that financial sanctions lead to the abolition of the installation.”
This mentality pushes Trump to create new tools. Lipsky added that although Joe Biden has expanded the use of old economic cranes, Trump is building new tools.
The definitions serve three goals under Trump
As you can see below, Treasury Secretary Scott Payet divided it in simple terms. Trump got to know three buckets. First, as the leverage in commercial talks. Second, to increase revenues and help cover the cost of expanding tax cuts for 2017. Third, to re -balance trade for America. Trump does not choose one at one time. Sometimes he does the three.
This is how I played with Colombia. Early of his second term, Trump threatened them with definitions, penalties, visa and more. the reason? Colombia refused to accept the migrants who were deported. The country was quickly folded, concerned about falling into an expensive trade war.
A former Biden official confirmed that this is how Trump works. “In Trump’s minds, the customs tariff feature is that even if your goal is not a cave and you have to impose it, at least you get some money,” said Peter Harel, who was working in the international economy in the National Security Council.
The strategy may be clear, but the reactions were not calm.
China, Canada and Mexico respond
China did not wait. They answered the definitions of up to 15 % on American agricultural goods and even banned exports to some US defense contractors. Foreign Minister Wang Yi described the American movements “evil” and “two sides”.
Canada was not calm either. Prime Minister Justin Trudeau described the move as “a very stupid thing to do.” After Trump launched a blanket tariff, Canada slapped with a 25 % tariff on American goods worth $ 30 billion. This includes orange juice, peanut butter, wine and coffee. These are still in place. Canada awaits waiting for the second round, which will strike cars, steel and aluminum – but they put it on a temporary stop at the present time.
Mexico played differently. President Claudia Xinbom surpassed the dream. I went to the table instead. I have succeeded now. Trump said on the social truth that he delays the customs tariff for Mexican imports even after April 2 “as housing, with respect for President Shinbom.”
Trump eyes of customs tariffs are higher if resistance countries
Trump does not stop at 25 %. If countries continue to buy oil from Venezuela, it can pay up to 30 % or more. If they start cooperation? It may drop it. Either way, it is a tool that allows it to set pressure in the actual time.
The bottom line is that Trump uses the American economy as a weapon, again. It targets foreign governments, companies, and even gray market operators. All wrapped in a label just formulated – secondary definitions.
Whether it is in the court or not, whether it is executed or not, it does not seem to care. It is direct. It’s high. And like everything else does Trump does, it is very logical.
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