CARACAS (AP) — Venezuelan President Nicolás Maduro announced on Monday that he is preparing to decree an “economic emergency” that would grant him special powers to address the crisis that, according to him, is looming in the world as a result of the imposition by the government of Donald Trump of a global base tariff of 10% and higher tariff rates for dozens of countries that have trade surpluses with the United States.
The decree would also aim to address the effects of the new US sanctions imposed on Venezuela.
“Tomorrow (Tuesday) I will sign the constitutional decree of economic emergency to protect and defend the economy of all Venezuela,” Maduro declared on his weekly television program.
Through the declaration of an economic emergency, the president commented that he seeks to assume “special, constitutional, extraordinary functions to advance in the defense of the Venezuelan economy, in its promotion,” and have instruments “to emerge successfully in the face of all foreseeable circumstances,” including global economic uncertainty. He did not provide further details.
Global markets plummeted the day after Trump’s announcement, and experienced an even greater drop after China announced it would retaliate with similar tariffs.
“The government of the United States is taking a hatchet and destroying the economic rules of the world, completely destroying international trade and economic law; it is destroying the World Trade Organization, and the peoples of the south have to prepare and produce, work, observe, and reconfigure our national and international relationships, our trade,” declared Maduro.
“It is not possible to pretend to break global, economic, and commercial coexistence with a tariff war that makes no sense and punishes all of humanity,” he added.
Maduro made his announcement almost two weeks after Trump announced new sanctions on Venezuelan oil exports, including the imposition of a 25% tariff on all imports from any country that purchases oil or gas from Venezuela. Recently, Trump also announced a 15% tariff on the South American country.
In March, the United States Department of the Treasury formalized the end of the license that allowed the energy giant Chevron Corp. to operate in Venezuela. In recent years, Chevron has become a financial lifeline for the Maduro government.
The license began in November 2022, during the government of former president Joe Biden, and allowed the American company to pump and export Venezuelan oil.
After the Venezuelan economy experienced some stability between 2021 and 2023 following a devastating hyperinflation, since last October it has been facing a marked decline, which is expected to worsen with the imposition of new U.S. sanctions.
Meanwhile, the official exchange rate, which had been artificially maintained at approximately 36 bolivars per dollar - largely thanks to the injections of foreign currency from the Central Bank of Venezuela (BCV) and Chevron - nearly doubled as of October 24th due to the increase in public spending, which was channeled into the foreign exchange market.
The result was a rapid depreciation of the bolivar and an increase in the official exchange rate and the parallel market. The suspension of Chevron’s license had a direct impact on the supply of foreign currency, according to economist Pedro Palma, director of the firm Ecoanálitica, as told to the AP. At the same time, prices—which are set based on their value in dollars—have increased drastically. The Central Bank of Venezuela has not published inflation figures since October 2024.
The Venezuelan Observatory of Finance, an independent analysis center, estimates that the accumulated inflation in the first quarter of the year was 36.1%, while the year-on-year variation reached 136%.
Washington began to intensify sanctions against Venezuela after Maduro’s first reelection in 2018, in an election where several of the most popular opposition candidates were barred from running. Since then, the ruler has deepened his control over power, and in the elections of July 28th last year, he was declared the winner for a third six-year term, despite his adversaries presenting evidence that the elections were fraudulent. The US government responded with another round of sanctions against officials accused of obstructing the elections and committing human rights violations.