In Executive Order (“E.O.”) 14245 of March 24, 2025, President Trump announced that a 25 percent tariff may be imposed on all goods imported into the United States from any country found to import Venezuelan oil, whether directly from Venezuela or through third parties, effective April 2, 2025. The E.O. defines Venezuelan oil as “crude oil or petroleum products extracted, refined, or exported from Venezuela, regardless of the nationality of the entity involved in the production or sale of such crude oil or petroleum products.”
The E.O. authorizes the Secretary of State to determine in his discretion whether the 25 percent tariff will be imposed on goods from any country that imports Venezuelan oil. Once imposed on a country, the tariff shall expire one year after the last date on which the country imported Venezuelan oil, or at an earlier date as determined by the Secretary of Commerce.
Similar to recent tariffs imposed on imports from Canada, Mexico, and China, President Trump issued these tariffs pursuant to the International Emergency Economic Powers Act (“IEEPA”). The E.O. cites the actions and policies of the Maduro government in Venezuela and the activities of the Tren de Aragua gang, a transnational criminal organization originating in Venezuela and designated as a Foreign Terrorist Organization and a Specially Designated Global Terrorist organization, as posing an unusual and extraordinary threat to the national security and foreign policy of the United States.
Since the United States imposed sanctions on the Venezuelan state oil company Petróleos de Venezuela SA (“PDVSA”) in 2019, China has become the largest importer of Venezuelan crude oil. According to a Department of Energy report issued in February 2024, China has loaned close to $50 billion to Venezuela in exchange for crude oil deliveries over the last decade, and as of 2023, China received 68 percent of Venezuela’s crude oil exports.
Notably, the E.O. explains that duties imposed by this order will be supplemental to duties on imports already imposed pursuant to IEEPA, Section 232 of the Trade Expansion Act of 1962, Section 301 of the Trade Act of 1974, or any other authority. Therefore, if 25 percent duties are imposed on imports from China (which includes both Hong Kong and Macau) due to China’s imports of Venezuelan crude oil, those duties will be imposed in addition to the current 20 percent duties imposed on all goods of China, as well as any other applicable duties (e.g., Section 301, Section 232).
“Secondary” Tariffs
The administration has labeled these tariffs imposed on countries importing Venezuelan oil “secondary tariffs.” These secondary tariffs are designed to impose a penalty on countries that trade with a country at odds with U.S. foreign policy or national security interests — in this case, Venezuela.
Secondary tariffs are akin to secondary sanctions, which are used to penalize entities in third countries that engage in transactions with parties in countries subject to U.S. sanctions. However, secondary sanctions generally restrict or prohibit those third country entities from accessing the U.S. financial system and/or the broader U.S. economy, whereas these secondary tariffs do not prohibit countries that import Venezuelan oil from exporting goods to or otherwise trading with the United States. They instead impose an additional tariff on goods from such countries.
The Trump Administration’s utilization of secondary tariffs to negotiate for certain foreign policy outcomes may signal a departure from previous administrations’ reliance on economic sanctions to achieve similar ends. As expressed by Treasury Secretary Bessent in his confirmation hearing, President Trump “believes that we’ve probably gotten over our skis . . . on sanctions, and that sanctions may be driving countries out of the use of the U.S. dollar. So tariffs can be used for negotiations.” In fact, President Trump has already warned that he may impose secondary tariffs of 25 to 50 percent on purchasers of Russian oil if Russia blocks efforts to end the war with Ukraine. Thus, the Trump Administration looks poised to impose additional secondary tariffs to achieve its various foreign policy and national security goals.
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Cassidy Levy Kent’s attorneys, compliance professionals, economists, and licensed customs brokers have experience assisting clients navigating tariff changes, export controls, and sanctions issues. We expect further developments in this space and will continue to provide updates. Please contact us with any questions.