Venezuela: A Shift in U.S. Approach Under the Trump Administration
Following President Trump’s inauguration, hopes for dialogue with Venezuela diminished as he criticized Maduro’s government and reinstated sanctions. Secretary Rubio expressed continued opposition to Maduro, reinforcing the possibility of further sanctions against Venezuelan oil exports. Investors are advised to approach risks related to Venezuela prudently.
Following President Trump’s inauguration, Envoy Richard Grenell visited Caracas and successfully negotiated the release of six detained Americans. This interaction prompted Venezuela to send two planes to the United States to repatriate 200 deportees, indicating potential agreements. Consequently, there was speculation about a possible dialogue between the Maduro administration and the Trump White House.
However, a shift in policy became evident when President Trump criticized Maduro’s regime on February 26 for not upholding democratic principles and for delays in deportation processes. He also rescinded certain oil transaction licenses that had been granted by the previous administration, limiting foreign companies’ operations within Venezuela.
On February 27, Secretary of State Marco Rubio firmly expressed his opposition to Maduro during a Fox News interview. When questioned about whether Maduro should resign, Rubio remarked, “Well, we’re going to work on that policy…We’re not going to discuss publicly what our work is going to be in that regard, but he remains the same threat today that he was two years ago, three years ago, four years ago. That’s going to have to be dealt with.” Rubio’s known stance against Chavismo positions him as influential in shaping U.S. policy towards Venezuela.
Consequently, we anticipate that further sanctions aimed at undermining Venezuelan oil and gas exports may be implemented in the near to medium term. This approach has been previously employed by Washington and aims to challenge the sustainability of Maduro’s administration. It is important to note that sanctions against Venezuela have not yet led to a change in regime.
Given these developments, we recommend that investors approach Venezuela-related risks with caution. For more insights, please refer to our recent note titled “So It Seems, the Hard Way It Is.”
Main contributor: Alberto Rojas, Investment Strategist
In summary, recent diplomatic efforts between the United States and Venezuela have not led to meaningful changes in relations or governance under Maduro. Policy criticism and potential sanctions signal a return to a more adversarial stance, particularly highlighted by Secretary Rubio’s comments on Maduro as an enduring threat. Investors are advised to remain cautious regarding Venezuelan market risks as the situation continues to evolve.
Original Source: www.ubs.com
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