The Trump administration froze all Venezuelan government assets in a dramatic escalation of tensions with Nicolás Maduro that places his socialist administration alongside a short list of adversaries from Cuba, North Korea, Syria and Iran that have been targeted by such aggressive U.S. actions.
The ban, blocking American companies and individuals from doing business with Maduro’s government and its top supporters, took effect immediately Monday and is the first of its kind in the Western Hemisphere in more than three decades, following an asset freeze against Gen. Manuel Noriega’s government in Panama and a trade embargo on the Sandinista leadership in Nicaragua in the 1980s.
While the order falls short of an outright trade embargo — notably, it spares Venezuela’s still sizable private sector — it represents the most sweeping U.S. action to remove Maduro since the Trump administration recognized opposition leader Juan Guaidó as Venezuela’s rightful leader in January. Critically, it also exposes foreign entities doing business with the Maduro government to U.S. retaliation.
“The apparent goal is to give the U.S. the ability to apply the law beyond its borders to allies of Maduro like China, Russia, Cuba, Iran and Turkey,” said Russ Dallen, the Miami-based head of Caracas Capital Markets brokerage. “Should those foreign entities continue doing business with Maduro they can have their U.S. assets seized.”
The executive order signed by President Donald Trump justified the move by citing Maduro’s “continued usurpation of power” and human rights abuses by security forces loyal to him.
U.S. National Security Adviser John Bolton hinted earlier Monday that far-reaching U.S. action was close at hand. Speaking to reporters on the eve of an international conference in Peru to show support for Guaidó, he said that the U.S. was readying measures “that will show the determination that the United States has to get a peaceful transfer of power.”
Russia, which has staunchly backed Maduro, denounced the U.S. action. Konstantin Kosachev, the head of the Russian upper house’s international affairs committee, said Tuesday the move amounts to “international banditry.” He added in remarks carried by the state RIA Novosti news agency that it represents an “open meddling into Venezuela’s internal affairs.”
The measures are likely to exacerbate suffering in an already moribund economy marked by six-digit hyperinflation and a deep, multi-year contraction that surpasses that of the Great Depression in the U.S.
Previous sanctions targeting the South American nation’s oil industry, the source of almost all of its export earnings, have already accelerated a crash in oil production that started with Maduro’s election in 2013 following the death of his mentor Hugo Chavez.
More than 100 officials and government insiders also have had their U.S. assets frozen and blocked from doing business with Americans. As part of the executive order, Americans or U.S. companies that do business with such individuals face penalties. The same Maduro supporters will also be banned from entering the U.S.