Putting pressure on Venezuela crude buyers

A US plan to slap tariffs on countries buying unsanctioned Venezuelan oil marks an unprecedented, and potentially potent, measure of punitive economic pressure against countries that Washington would not tolerate against other countries like Russia and Iran, analysts said.

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The US has maintained sanctions on all three countries for years to hobble their energy revenues, but Washington has tended to enforce sanctions using designations that isolate people or companies that break them from the US financial system.

“On Monday night, President Donald Trump broke with that tradition, signing an executive order authorizing his administration to impose blanket 954 tariffs under the 1977 International Emergency Economic Powers Act on imports from any country that buys Venezuelan crude oil and liquid fuels, according to Reuters.

Analysts said there are at least two benefits to using tariffs, instead of targeted designations, as the penalty for violating sanctions. Tariffs deliver pain across a country's entire economy and they are simpler to enact than designations.

“Use of IEEPA to immediately implement broad and sweeping tariffs without any process or procedure remains an unprecedented but potentially extremely powerful weapon in Trump's trade and foreign policy arsenal,” said Glenn Schwartz, director of energy policy service at consultancy Rapidan Energy.