Venezuelan Bolivar Crashes: Shockwaves from New U.S. Tariffs on Venezuelan Oil

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Venezuelan Bolivar Plunges After Secondary Crude Tariff Regime Announcement

Due to a lack of U.S. dollars caused by the government’s financial struggles during an economic trade war, the Venezuelan bolivar has been rapidly losing value compared to the U.S. dollar. The Trump administration’s sanctions on Venezuelan crude oil exports are limiting the country’s access to foreign currency, which in turn is exacerbating these monetary imbalances.

Secondary Tariff Announcement Prompts Steep Venezuelan Bolivar Drop

The Trump administration’s declaration about imposing additional tariffs on nations buying Venezuelan oil has led to chaos and instability within Venezuela’s currency market.

Over the past while, the Venezuelan Bolivar had been relatively stable thanks to the government’s frequent addition of US dollars to the domestic market. However, it has more rapidly depreciated against the U.S. dollar in recent times, even surpassing the 100 Bolivars per US Dollar mark.

Read more: bitcoin.com/trump-debuts-never-before-seen-secondary-tariff-strategy-against-venezuela/”>Trump Debuts ‘Never Before Seen’ Secondary Tariff Strategy Against Venezuela

Economists viewed it as a significant setback for the country’s economic well-being. Due to inflation, commercial exchanges and costs are becoming more expensive, which negatively impacts Venezuelan citizens who are paid in the domestic currency.

Alejandro Grisanti, managing partner at Ecoanalitica, stated that there had been an increase in the price of the dollar even before the announcement of the secondary tariffs on national oil. He stated:

The strengthening of these restrictions is expected to cause oil production to decrease, potentially triggering an economic downturn marked by a significant rise in the value of the U.S. dollar and increased inflation rates.

He stated that we can only determine the impact of this tightening on economic factors once the complete rollout of the new licensing system has been published.

1. The cessation of Chevron’s oil extraction in Venezuela and the related economic impact is putting strain on maintaining currency stability due to the government’s substantial budget expenditures.

2. The withdrawal of Chevron from oil production in Venezuela has led to difficulties in keeping the local currency stable, as a result of the large amounts of public spending by the government.

3. The termination of Chevron’s operations in Venezuela’s oil sector is causing trouble for maintaining currency stability because of the heavy government spending levels.

4. With Chevron ending its oil activities in Venezuela, it is becoming more challenging to preserve currency stability due to the significant public expenditures made by the government.

5. The departure of Chevron from the Venezuelan oil industry is making it harder for the local currency to stay stable, considering the high level of spending by the government.

Despite this, Trump’s second round of tariff declarations is setting the United States on a path towards confrontation with both China and Spain, significant buyers of Venezuelan crude, amidst a halt in oil deliveries due to the expected implementation of these new policies.

China’s Foreign Ministry Spokesperson, Guo Jiakun, criticized this move, stating that it is part of the U.S. abuse tradition of using “long-arm” jurisdiction to interfere in the internal affairs of other countries. “We urge the U.S. to cease its interference in Venezuela’s internal affairs, lift its illegal unilateral sanctions against Venezuela, and take steps that contribute to peace, stability, and development in Venezuela and beyond,” he stressed.

It’s uncertain if Trump will yield on these proposals, given his past record of backing down, or if they will actually go into effect on April 2nd.

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2025-03-28 21:00