Trump Imposes Severe Sanctions Against Venezuela with Executive Order

The government of Donald Trump imposed severe sanctions against Venezuela on Friday, September 3, and urged American banks to refrain from any financial transactions with the Venezuelan government or its state oil company. The sanctions, signed by the U.S. President in the form of an executive order, will escalate tensions between Venezuela and the U.S. and deepen the economic crisis in the country. A statement released by the White House stated: "These actions are designed to precisely cut off a vital financial source for the dictatorship of (Nicolas) Maduro to continue its illegitimate rule, protect the U.S. financial system from complicity with corruption in Venezuela and impoverishing the people of that country, while allowing for humanitarian aid to be delivered." According to the Associated Press, the new sanctions prohibit any transactions involving bonds and stocks issued by the government and the state oil company of Venezuela. Additionally, the trading of any current specific bonds owned by the public sector of Venezuela, along with dividend payments to the Venezuelan government, is also banned. However, the White House has stated that this order allows the Treasury Department to issue licenses for commercial and humanitarian transactions, including financing trade, exporting and importing oil products, and transactions that only involve the American branch of the state oil company of Venezuela. Mike Pence, the U.S. Vice President, previously announced these sanctions and tweeted that the United States "will not remain silent in the face of Venezuela's collapse." The Trump administration had promised last month that it would impose severe sanctions against the country if Nicolas Maduro's government pursued a constitutional assembly with its supporters. Since then, this assembly has begun its work, and its 545 representatives joyfully voted to dismiss the Attorney General of Venezuela, removing power from the opposition-controlled Congress and forming a "truth commission" that many fear will be used as a tool to target opponents. Several opposition mayors have also been removed from office or the pro-government Supreme Court has issued orders for their arrest. The Associated Press reports that the new sanctions will likely exacerbate the crisis in Venezuela's oil-dependent economy, which has shrunk by more than 35% since 2014. This level of economic contraction exceeds that of the "Great Depression" in the U.S. economy before World War II. Mr. Maduro, who is among 30 senior Venezuelan officials banned from entering the U.S., seems likely to resign if the economic crisis worsens. He warned last week that the Trump administration is preparing to create a "commercial, oil, and financial deadlock," similar to what Cuba faced for decades. Maduro added that this means the path for U.S. military intervention would be paved. He told foreign reporters on Tuesday: "The economic measures that the U.S. government is preparing will worsen the economic situation in Venezuela." The Venezuelan government and its state oil company have about four billion dollars in debt due before the end of this calendar year, while the total international reserves of Venezuela are 9.7 billion dollars.