(Bloomberg Opinion) -- To hear National Security Adviser John Bolton tell it, the U.S.’s new sanctions on Venezuela are meant to finally bring Nicolas Maduro to his knees.
At a conference in Lima, Peru, this week, Bolton said the sanctions would target foreign concerns that continue to do business with Maduro’s despotic regime, risking their access to U.S. markets. These are the same kinds of penalties imposed on Iran and Cuba, or as Bolton calls it, “the club of rogue states.”
Bolton didn’t say it, but the real targets of these sanctions are Russia and China, both of which are owed billions by Venezuela. Unable to sell his oil on the world market because of sanctions on the Venezuelan state-owned oil company, Maduro is now paying his debts with shipments of oil.
The new restrictions, if they go into effect, will prevent even that. In effect, says Fernando Cutz, a former senior official at the National Security Council under both presidents Donald Trump and Barack Obama, “We are telling the Russians and Chinese they can no longer be paid back.”
The problem is that the executive order Trump issued on Aug. 5 leaves it to Treasury Secretary Steven Mnuchin — in consultation with Secretary of State Mike Pompeo — to designate the Russian and Chinese oil companies that are receiving Venezuela’s oil. As Cutz told me, the success of Trump’s strategy depends on the Treasury Department’s willingness to name names.
And if recent history is any guide, Mnuchin will not be acting swiftly. He has been a consistent voice inside the administration against sanctions in general, and against sanctions on China and Russia in particular. He advised U.S. firms in June to seek exemptions to the executive order barring most transactions with Chinese telecom giant Huawei. The Treasury Department also negotiated a deal earlier this year with Russian oligarch Oleg Deripaska allowing him to divest from his companies to avoid U.S. sanctions.
What’s more, Russia and China both have enormous leverage right now over the U.S. For China, there is the escalating trade war. China showed this week that it can retaliate in ways that will sink the U.S. stock market. Russia, meanwhile, can still play spoiler in Syria, where the U.S. is urging Turkey not to follow through on threats to attack Syrian Kurds who aligned with America in recent years against the Islamic State.
Over time, then, these new Venezuela sanctions could come to seem rather hollow. Consider, by way of comparison, the sanctions on Iran’s oil exports. In May, the Trump administration announced that it was ending exemptions for China and four other countries. But China continues to receive shipments of Iranian oil.
Perhaps the best way to understand the new sanctions is as a form of political messaging. The timing is important; U.S. officials have become impatient with talks between Maduro’s regime and the administration of Juan Guaido, the man America and more than 50 other countries recognize as Venezuela’s interim president. U.S. officials say the announcement is meant to pressure Maduro’s envoys to begin real negotiations about a transition of power.
That’s a worthy goal, but it’s not the best way to strengthen Guaido’s hand. More creative thinking is needed. One way to pressure Maduro is to establish an international fund for Guaido’s interim government to begin providing some of the services Maduro’s regime cannot. Trump can also instruct the Pentagon to help make it easier for average Venezuelans to access the Internet and evade the regime’s efforts to monitor and control that access.
It’s also possible that Mnuchin has every intention of using the new executive order to crack down on Russian and Chinese entities propping up Maduro. But if he fails to act, then this week’s sanctions will serve as a mere irritant to America’s adversaries, and as yet another setback for American credibility.
To contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Eli Lake is a Bloomberg Opinion columnist covering national security and foreign policy. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun and UPI.
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