On Monday, U.S. President Donald Trump announced plans to impose a 25% tariff on countries purchasing oil and gas from Venezuela. This move could impact Asian markets, including China and India, and add to global trade uncertainty.

"Venezuela has been very hostile to the United States and the Freedoms which we espouse," Trump penned on his Truth Social network.  "Therefore, any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country."

According to an order signed by President Donald Trump on Monday, the newly announced 25% tariff on both direct and indirect buyers of Venezuelan oil could take effect as early as April 2. Per the order, the tariff will remain in place until one year after a country’s last import of Venezuelan oil unless Washington decides to lift it sooner. Trump’s announcement follows the suspension of deportation flights between the U.S. and Venezuela last month after he accused Caracas of failing to uphold an agreement to accept deported migrants. In response, Venezuela refused to take back deportees. However, on Saturday, Caracas announced it had reached a new deal with Washington to resume repatriation, leading to the deportation of nearly 200 Venezuelan citizens via Honduras.

The U.S. President’s decision could have a significant impact on China and India, as Venezuela supplies oil to both countries, as well as to the United States and Spain. In December 2023 and January 2024, India emerged as the largest buyer of Venezuelan crude oil. India imported around 191,600 barrels daily in December, which increased to over 254,000 in January. That month, India accounted for nearly half of Venezuela’s total oil exports, which amounted to almost 557,000 barrels per day. In 2024, India imported 22 million barrels of Venezuelan oil, making up 1.5% of its total crude oil purchases. Meanwhile, in February, according to an AFP report, Venezuela exported approximately 500,000 barrels of oil per day to China and around 240,000 barrels per day to the United States.

After Trump's announcement, oil prices rose by 1% on Monday. Brent crude futures increased by 84 cents (1.2%) to $73 per barrel, while U.S. West Texas Intermediate crude climbed 83 cents (1.2%) to $69.11 per barrel. However, price increases were limited as the U.S. granted oil producer Chevron an extension until May 27 to wind down its operations and exports from Venezuela. Initially, Trump had set a 30-day deadline from March 4 for Chevron to end its license. These two decisions ease some pressure on Chevron while increasing pressure on other buyers of Venezuelan oil. However, how the Trump administration will enforce the new tariff remains unclear.

After returning to the White House in January, Trump has aggressively used tariffs against U.S. allies and rivals to influence economic and diplomatic policies. The Secretary of State and other U.S. agencies have the authority to decide whether the tariff will be enforced.

On Monday, Trump told reporters that the proposed 25% tariff would be added to existing rates. He has declared April 2 as "Liberation Day" for the U.S. economy, vowing to impose reciprocal tariffs on trading partners to counter what Washington views as unfair trade practices. Earlier, he hinted at sector-specific tariffs around the same time, but the White House later suggested it might take a more targeted approach.