THIS WAS NOT A DISTRACTION: VENEZUELA & THE FUTURE OF US FOREIGN POLICY
- Onna-lisa Kyom
- 2 days ago
- 8 min read
INTRODUCTION
The first few weeks of 2026 were busy ones for the Trump administration. While most were reflecting on their hopes for the new year in an attempt to preserve some sense of normalcy, Trump and his team were busy planning the seizure of Venezuela, ICE’s occupation of Minnesota, and attempting to negotiate the acquisition of a country that has no interest in becoming a US territory (Greenland).
For many, the aggressive nature of the Trump administration’s actions was meant to grab headlines. Their true objective was deflection; the creation of a smoke screen behind which they can easily hide the scandal of the incomplete Epstein files release, their failed prosecution of James Comey, and a floundering economy. That assumption is both rational and intuitive given that those issues - particularly the Epstein files and the social policies driving more Americans into financial distress - are the most direct threats to this administration’s domestic authority and stability.
As tempting as it is to frame events of the past month as side quests designed to draw attention away from clear areas of vulnerability, the truth is more complex. Some of the administration's more surprising decisions are clearly driven by Trump's personal whims, but others are telegraphed via slow and deliberate positioning that we often miss because it feels out of character. We make the mistake of assuming that because the Trump administration is often reactive and disorganized that it is always reactive and disorganized.
In this issue of Current Signal we’ll explore how recent changes in the US-Venezuela relationship, how those changes represent movement towards the Trump administration’s long term goals, and what we might expect in the future.
THE TIMELINE
Note: we created a visual timeline of the conflict between the US and Venezuela, you can find it here, and as an appendix to this document
The first hints about the trajectory of the US-Venezuela relationship occurred as early as 16 January of 2025 when Doug Burgum, who currently leads the Interior Department, mentioned the country during his nomination hearing in response to a question about restricting fossil fuel production in favor of renewable energy:
“America produces energy cleaner, smarter and safer than anywhere in the world. When energy production is restricted in America, it doesn't reduce demand, it just shifts production to countries like Russia, Venezuela, and Iran – whose autocratic leaders don't care about the environment”
For what it’s worth, Burgum’s primary concern isn’t the environment either; Venezuela’s energy partnerships are. It is estimated that China has invested $2.1 billion into Venezuela’s oil sector since 2016, and, per Reuters, Chinese firms hold the largest oil claims to Venezuela’s reserves (followed by Russia). The Trump administration has become increasingly hostile to China because of its perceived dominance in the energy sector and near complete control of the rare earth minerals market. It's in this context that the Trump administration’s hostility to Venezuela begins to make sense.
Just over a month later, on 26 February 2025, President Trump announced he was canceling licences that allowed the US company Chevron to import oil from Venezuela for the country’s failure to make progress on election reforms and lack of cooperation with his administration’s immigration goals (not, as he would later claim, drug trafficking or “narco terrorism”). In March, Trump also announced new tariffs on any country buying Venezuelan oil, and the cumulative impact of both those restrictions took effect quickly. By the beginning of May contract cancellations caused Venezuela’s oil exports to fall by about 20%.
In early June the economic impact of decreased oil revenue had taken its toll. Venezuela was forced to increase taxes in order to offset lost income from oil sales, and to the extent that things stabilized, they did so due to increased oil purchases from China. Deepening economic ties between Venezuela and China was obviously not the goal of the Trump administration’s pressure campaign, so by the end of July the Trump administration reversed course on sanctions and prepared to issue new licenses that would allow companies like Chevron to resume business. It was also prepared for more direct military conflict. The first ships carrying oil from Venezuela set sail for the US on 15 August, and the first warships deployed to combat “drug cartels” were headed toward Venezuela by the 18th.
The second half of this story should be much more familiar:
In September and October the Trump administration remained hyperfocused on claims that Venezuela wasn’t doing enough to combat drug trafficking, and intercepting or attacking boats it said were transporting drugs.
In November it began upgrading formerly abandoned military bases and moving military assets into the region.
By December the mask finally falls, and with it goes the pretense that there was ever any concern about the export of illegal drugs: the US begins seizing oil tankers (well outside the scope of its initial trafficking goals), hints that it would be “smart” for Venezuela’s President Nicolás Maduro to leave the country, and orders the military to focus on a quarantine of Venezuela oil.
On 03 January the US military seized President Maduro, and President Trump declared that the US will run Venezuela “until such time as we can do a safe, proper and judicious transition”.
Whether or not that transition will ever occur remains to be seen, but in the meantime exports of Venezuelan oil to China have fallen sharply, even as US oil refiners struggle to absorb excess supply. Cutoff from their usual sources, China’s independent oil refiners have started purchasing oil from Iran.
WHAT THIS MEANS
In examining this entire series of events closely we learn a lot about the Trump administration's methods and motives. As far as its methods are concerned, we should take seriously the following:
The Trump administration understands the value of coercion, even if it prefers force
Over the past 12 months we’ve watched the Trump administration consistently respond to discontent within communities impacted by its domestic policies with direct, and unrestrained force. Whenever it can, it chooses the hammer over the flyswatter, at least where its own citizens are concerned. That tendency toward aggressive (and in some cases impulsive) action has wired many of us to overlook other important but more subtle signals that point toward its actual objectives. While it rarely “negotiates” in the traditional sense, it does know when to apply pressure without applying force. Had China not intervened to support Venezuelan oil exports through the US’s economic sanctions, it is very likely that that country would have collapsed making it much easier to install political leaders amenable to its specific goals.
The Trump administration understands the value of a well placed figleaf, especially in the context of the US legal system
Many legal observers have noted the Trump administration's tendency to misapply the law and misrepresent facts in its legal filings. The arguments they present before the court often aren’t strong enough to win their cases, but that’s not always the goal: the legal system can also effectively be misused to sideline individuals and delay outcomes they might find unfavorable. Where president Maduro is concerned, it is hard to imagine that the US’s case against him will survive much legal scrutiny, but it doesn’t need to survive in order to be effective. While Maduro is currently stuck at the Metropolitan Detention Center (MDC) in Brooklyn and attempting to navigate the US court system, the US has successfully used its new influence in Venezuela and the threat of “boots on the ground” to take direct control of oil sales and direct proceeds to US controlled accounts.
As far as the Trump administration’s motives and goals are concerned, I think we should take seriously the following:
More Military Action Abroad Is Inevitable
At time of publication the Trump administration is currently “in talks” with the leadership of Iran, and claims to have the “framework of a deal” that might satisfy its demands for more ownership of Greenland. That shouldn’t be too reassuring given that the first leaks about ongoing negotiations with Iran indicate both sides refuse to budge on the issue of nuclear enrichment, and as recent as this Tuesday Greenland’s prime minister has indicated that the US still aims for complete control of the country:
It should be clear by now that the Trump administration is willing to force the result it wants when “softer” methods aren’t effective, it will simply take what it can’t get through the facade of diplomacy.
An Important Note:
The country of Cuba is particularly vulnerable at the moment as specific members of the Trump administration are adamant that regime change in the country is necessary. They are likely behind the current order to levy a tariff of 30% on goods from any country that sends oil to Cuba.
On 29 January, the financial times reported that the entire country had only 15-20 days of oil left. If the US and Cuba are unable to come to an agreement before then, the US is likely to intervene on its own terms.
Cuts To Social Spending Will Continue In Order To Fund Military Action Abroad
We all know that the US government funds its operations via two methods: bonds (debt) and tax income from its residents and citizens. Unfortunately for the Trump administration its approach to foreign policy is contributing to concerns that the US is becoming an unreliable and unstable partner. This has led both private funds and other countries to offload US debt.
On the income side, tax revenue is likely to decline as the US economy struggles. Long term unemployment is the highest since 2021 and layoffs in the month of January were the highest reported since 2009.
None of this has deterred Trump who called for a 50% increase in military spending (to 1.5 trillion) by 2027 in order to build “the ‘Dream Military’ that we have long been entitled to”. That will be difficult to accomplish without the tax income or debt necessary to fund such a large expansion, so what’s left to examine are expenses. The Trump administration's focus of eliminating social spending isn’t just ideological, it’s about maximizing the resources available to fund its military operations abroad.
China Is Being Treated As An Existential Threat
It is not a coincidence that China appears as a background character in most of the Trump administration’s foreign conflicts:
China was the primary recipient of Venezuela’s oil before it took control of the country.
After China turned to Iran to fill capacity lost to Venezuela, US-Iran relations appear to be at a critical juncture.
Part of Greenland’s “strategic importance” is about its supply of rare earth minerals (REM), and acquiring it is aligned with US goals to counter China’s dominance in the REM market.
Trump has also explicitly said that if the US does not take control of Greenland Russia or China will
Direct conflict with China isn’t likely to happen any time soon, but if it ever happens Taiwan will probably be the flashpoint. Per China’s President Xi, Taiwan is “the most important issue in China-US relations”.
In the meantime, expect the cold war between China and the US to continue, and for US military action abroad to focus on containing Chinese influence and power, especially where energy and natural resources are a concern.
This is about China, But Also AI
The other notable thing about the nomination hearing for current secretary of the interior Doug Burgum, was his specific comments with regard to AI, and the need to ensure an adequate supply of US energy for data storage and AI processing:
Those comments were not made idly. Burgum has continued to emphasize the importance of meeting the energy demands created by AI technologies. Consistent fuel is more important than clean fuel. From his perspective, there is plenty of time to solve the climate crisis: “What's going to save the planet is winning the AI arms race”.
