President Donald Trump has threatened to impose tariffs of 25% on US imports from countries that purchase oil from Venezuela.
Trump described the move as a “secondary tariff” aimed at punishing the Latin American country “for numerous reasons”, including allegedly “purposefully” sending gang members to the US.
Separately, Trump suggested he was softening his plans for tariffs on imports from other countries, saying he “may give a lot of countries breaks”.
Markets ended the day higher after the comments, which appeared to confirm reports that he was narrowing the taxes he plans to announce on 2 April.
Trump has previously said he was looking to impose “reciprocal” tariffs on countries around the world, outlining plans for a system whereby “they charge us, we charge them”.
But on Monday he suggested the White House might be “nicer than that” when it came to the new tariff rates.
“We may take less than what they’re charging because they’ve charged us so much, I don’t think they could take it,” he said, while also acknowledging that some countries might be spared from the measures.
Leading share indexes in the US, which have fallen in steeply in recent weeks following Trump’s tariff threats, all rose on Monday.
The S&P 500 closed 1.7% higher, the Dow Jones Industrial Average closed up 1.2% while the Nasdaq finished 2.2% ahead.
Tariffs are a tax on imports. They are paid by the company that is buying the goods as opposed to the overseas business that is selling the product.
Since taking office in January, Trump has repeatedly used tariffs – or the threat of them – in an attempt to gain leverage in a range of disputes, only some of which are related to trade.
He said on Monday he still planned to impose tariffs on specific products, including cars, lumber and computer chips, claiming the possibility of such measures were already helping to spur investment in the US.
His latest threat against Venezuela is expected raise pressure on current buyers of oil – which include China, India and Spain – to reduce their dealings in the country, which have provided a critical financial lifeline to the Venezuelan government.
Trump has already raised tariffs on Chinese imports to at least 20% since February. He told reporters he intended to the latest announcement to be added on top of existing levies.
For Venezuela, China is a major buyer of its oil. But Venezuela is not a big source of crude for China, which imported more than 11 million barrels per day last year.
The US is a major buyer of Venezuelan oil, as a result of exemptions from economic sanctions granted to US oil firm Chevron.
The Trump administration has previously signalled its intention to end those exemptions.
On Monday, the administration updated its order, giving Chevron until 27 May to wind down its operations in Venezuela, extending the deadline by two months.
Chevron declined to comment.
Oil prices rose more than 1% after the announcement.
