Current financial and economic relations between USA and Venezuela
US and Venezuela have a very consensual relationship between each other because such relation is traditionally been characterized by trade, investment, and cooperation from both of the sides. But as the good and bad days are sides by side, the relations between these two countries plunged into worst level when the USA imposed economic sanctions on Venezuela because of the abuses against protestors during 2014-15 protests. The combative relations between the U.S. and Venezuela in topical eons have seen that country’s radical leaders assert the United States of engineering coup attempts and domestic unrest appear to be quietly giving way to renewed efforts at peacekeeping.
Now if we talk about the economic relationship between these countries then the United States is Venezuela’s largest trading partner. The two-pronged trade in goods between both states stretched to $23.9 billion in 2015. U.S. goods exports to Venezuela totaled $8.3 billion in 2015, down 25 percent from 2014. U.S. imports from Venezuela totaled $ 15.6 billion, down 48 percent from 2014, due principally to the fall in oil prices, U.S. exports to Venezuela comprise petroleum and refined petroleum products, machinery, organic chemicals, agricultural products, autos and auto parts. Crude oil dominates U.S. imports from Venezuela, which is one of the top five providers of extraneous oil to the USA.
Political tensions, state intervention in the economy, including expropriations, macroeconomic distortions, physical insecurity, corruption, and a volatile regulatory framework make Venezuela a challenging climate for U.S. and multinational companies. A multifaceted extraneous exchange rule and constrained admittance to dollars have disallowed firms from repatriating their earnings out of Venezuela and importing industrial inputs and finished goods into Venezuela. Extremely limited access to dollars, price controls, and rigid labor regulations have compelled many U.S. and international firms to lessen or shut down their Venezuelan maneuvers.
With rising oil prices and Venezuela’s oil exports accounting for the bulk of trade, bilateral trade between the US and Venezuela surged, with US companies and the Venezuelan government benefiting. Nonetheless, since May 2006, the Department of State that, pursuant to Section 40A of the Arms Export Control Act, has prohibited the sale of defense articles and services to Venezuela because of lack of cooperation on anti-terrorism efforts. Except the local turmoil diminishes enough to allow for secure business operations in Venezuela, the probability of U.S. firms minimizing their business operations upsurges. Coupled with desolate diplomatic relations, revamping U.S.-Venezuela relations proves to be a complex process that will take time, cooperation, and concessions from both sides. A significant break to improve relations does exist, but the United States must reveal to Maduro the vital role that U.S. companies continue to play for Venezuela’s economy and securing Venezuela as a quasi-ally will not only secure longer-term U.S. business benefits but also give the U.S supplementary influence in Latin America, a region that the Obama administration has unkempt. The best prospect for improving these relations is for Washington to send a diplomatic convoy to Venezuela to meet with President Maduro and administration officials and discuss interests in attaining greater domestic stability to maintain corporate operations.