Juan Guaido, lawmaker from the opposition party Popular Will, attends a session of the National Assembly at the Federal Legislative Palace in Caracas, Venezuela. (Photographer: Marco Bello/Bloomberg)

Maduro Squeezed as Trump Recognizes Guaido and Protests Expand

(Bloomberg) -- Venezuelan President Nicolas Maduro is under unprecedented pressure after the U.S. and other nations recognized opposition leader Juan Guaido as the country’s rightful head of state and protests against the ruling regime expanded.

Trump formally recognized Guaido minutes after the 35-year-old president of the Venezuela National Assembly declared himself the head of state. Countries including Canada, Argentina, Brazil, Colombia, and Panama quickly followed the U.S. lead.

Venezuelans took to the streets in the biggest opposition protests since mid-2017 to back Guaido and increase pressure on Maduro. While the leftist government crushed violent protests two years ago, this time poorer areas of the capital are leading angry demonstrations over failed public services, food scarcity and rising prices. Local press showed crowds gathering in major cities.

Maduro Squeezed as Trump Recognizes Guaido and Protests Expand

Read our Life in Caracas series here.

“The people of Venezuela have courageously spoken out against Maduro and his regime and demanded freedom and the rule of law,” Trump said in a statement. He said that because the country’s National Assembly had declared Maduro illegitimate, “the office of the presidency is therefore vacant.”

Maduro responded by breaking diplomatic relations with the U.S., giving American diplomats 72 hours to leave the country. Guaido said the diplomats are free to stay in the country.

“The United States does not recognize the Maduro regime as the government of Venezuela. Accordingly the United States does not consider former President Nicolas Maduro to have the legal authority to break diplomatic relations with the United States or to declare our diplomats persona non grata.” Secretary of State Michael Pompeo said in a statement on Wednesday evening.

“We call on the Venezuelan military and security forces to continue protecting the welfare and well-being of all Venezuelan citizens, as well as U.S. and other foreign citizens in Venezuela,” Pompeo added. His statement concluded with a warning: “The United States will take appropriate actions to hold accountable anyone who endangers the safety and security of our mission and its personnel.”

Diosdado Cabello, the powerful No. 2 in Maduro’s socialist party, called on supporters to keep vigil at the presidential palace Wednesday night to defend the government. Defense Minister Vladimir Padrino said in a tweet that the country’s armed forces wouldn’t accept a “self-proclaimed” president.

Shortly before Trump’s statement, Guaido said in a webcast from a protest in Caracas that he would assume the powers of the Venezuela presidency. He invoked a constitutional amendment that allows for the head of the legislature to lead a caretaker government until new elections can be held.

Since taking the helm of the legislature on Jan. 5, Guaido has aggressively pushed the military and the international community to recognize him as the rightful head of state.

“I swear to formally assume the powers of the national executive as interim president of Venezuela to achieve the end of the usurpation,” Guaido said on stage in East Caracas before thousands of Venezuelans who rallied around him on Wednesday. The crowd cheered and sang Venezuela’s national anthem after Guaido took the oath of office.

Venezuela’s loyalist Supreme Court had already announced that it would depose Guaido and nullify the assembly’s motion that declared Maduro’s rule invalid.

The U.S. has steadily expanded economic sanctions and denunciations of Maduro since Trump took office, all but urging that Venezuelans overturn their government. Venezuela’s dollar bonds, which have gained 25 percent on average this year, rallied further on Wednesday as the opposition increased pressure on Maduro. While most of Venezuela’s bonds are in default, investors believe regime change could usher in plans to fix the economy and restructure the debt.

Maduro Squeezed as Trump Recognizes Guaido and Protests Expand

The Trump administration has also prepared to sanction crude oil exports from the country, according to people familiar with the matter, but hasn’t decided whether to take that step. Maduro’s reaction to Guaido’s move will help dictate whether the administration imposes the sanctions, the people said.

Senators who supported Trump’s move, including Republican Marco Rubio of Florida, also called for the U.S. to designate Venezuela a state sponsor of terrorism, which would trigger a new set of restrictions.

“More U.S. actions are definitely on the table,” Jason Marczak, a Latin America expert at the Atlantic Council in Washington, said in an interview. “We have seen a very deliberate ratcheting up of sanctions under the Trump administration, and I expect that those sanctions will be significantly ramped up.”

‘All Options’

Trump told reporters at the White House that “all options are on the table” for the U.S. to use against the Maduro regime, though he said he isn’t currently considering military action.

A senior Trump administration official, speaking to reporters on condition of anonymity on Wednesday, suggested Trump will impose additional sanctions if Maduro doesn’t immediately turn over control of Venezuela’s finances to Guaido.

White House officials had already warned some U.S. refiners earlier this month that the Trump administration was considering sanctions on Venezuelan oil exports and advised them to seek out alternative sources of heavy crude.

Oil companies have beseeched the Trump administration not to take the step, warning the action could disadvantage Gulf and East Coast refiners designed to handle the Venezuela’s heavy crude and cause U.S. gasoline prices to spike.

The U.S. move to recognize Guaido risks a backlash, as Maduro is sure to warn that American “Yankees” are backing a coup against his government. But even invoking the checkered history of U.S. intervention in Latin American political affairs has worn thin for many Venezuelans and for opponents of Maduro throughout the region.

“We encourage other Western Hemisphere governments to recognize National Assembly President Guaido as the interim president of Venezuela, and we will work constructively with them in support of his efforts to restore constitutional legitimacy,” Trump said. “We continue to hold the illegitimate Maduro regime directly responsible for any threats it may pose to the safety of the Venezuelan people.”

Guaido has sought a transition government and has called for new elections. He and his supporters say Maduro’s latest term is illegitimate; about 60 countries concluded the election was fraudulent.

For now, at least, the competing claims of leadership by Maduro and Guaido may create a welter of confusion. Guaido may send an envoy to the Organization of American States, which has recognized his government. But at the United Nations, Venezuelan allies on the Security Council such as Russia and China would almost certainly block such a move. The U.S., in turn, could ignore Maduro’s representatives at the UN or demand that they be stripped of their accreditation.

“You very well might have competing diplomatic representations abroad,” Marczak of the Atlantic Council said.

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