MONEY

Not even a month in since the Trump administration captured Nicolás Maduro and the left-wing, Bolivarian regime led by Delcy Rodríguez has been “extremely cooperative.” “Thus far,” the White House said, she has “met all of the demands and requests of the United States”— around favoring American oil companies and investment, stopping narco-trafficking, and severing subordinance to extra-hemispheric rivals.

“Thus far” being the operative word. While in the immediate aftermath she appears to have stabilized the regime while cooperating with Trump, over the medium to long-term, Rodríguez’s attempt to satisfy US demands will likely require her to modify the very structures and processes—i.e., the mechanisms—that have underpinned the regime’s internal cohesion and stability for over two decades. 

Delcy, indeed, is in a quagmire.

Alas, that Delcy’s regime has remained stable is unsurprising. The Venezuelan regime has historically turned threatening crises—from mass protests, an unprecedented humanitarian crisis, and economic sanctions to a parallel government recognized by over 50 nations—into recurrent opportunities for consolidation. These survival mechanisms rely on loyalty coerced from civilians and engineered among military and political elites by weaponizing access to dwindling economic rents—from oil, as well as agriculture and minerals, illicit networks, and dependence on China, Russia, and Iran. The scale of this systemic pillaging is vast: since the Chávez era only, at least $300 billion have been diverted to fuel these survival mechanisms.

On the other hand, these are the mechanisms that the Trump administration expects to be overhauled or abolished. While these structures and processes were originally established by the regime, for the regime, the post-Maduro reality is that Rodríguez must now modify them with the US, for the US.

Rodríguez must also redirect scarce resources from pillaging into investments in ruined public infrastructure (especially roads, highways, freeways) and even in basic services like water or domestic gas.

Hence, Delcy’s quagmire. Reforming these mechanisms enough to satisfy the economic and security interests of a forceful (and eager) US administration risks, for regime elites, severing their access to rents that engineer their loyalty. Yet, mere superficial reforms risk Delcy’s fate with her new patron. Trump himself made it clear: “All political and military figures in Venezuela should understand what happened to Maduro can happen to them, and it will happen to them if they aren’t just, fair, even to their people.” 

Take for instance Trump’s demand that Venezuela grants privileged access to US oil companies and allows the US to have control over allocation from the financial proceedings. For Rodríguez to fully meet this, it will likely require much more than a mere reform of the Hydrocarbons Law. It necessitates the regulation, hiring, mobilization, and investment of resources to rebuild a decades-neglected, decimated national electricity grid, with 75% of Venezuelans suffering daily outages. Furthermore, Rodríguez must also redirect scarce resources from pillaging into investments in ruined public infrastructure (especially roads, highways, freeways) and even in basic services like water—to which only 36% of Venezuelans have daily access—or domestic gas, where over 70% receive it once every three months! And, on top of this, there is a Frankenstein-type financial system that has also presented opportunities for graft and provides all but predictability.

Washington’s expectation that scarce resources be directed toward restoring infrastructure and basic services while overhauling structural financial distortions to ensure US firms operate safely and profitably will strongly constrain Rodríguez’s ability to allow her inner circle to siphon these limited rents. Rodríguez will likely have to interfere with the very mechanisms of survival that have kept the elite unified: to satisfy Trump jeopardizes internal unity; to preserve internal unity risks facing the fate of Maduro.

During a recent visit to Caracas, CIA Director John Ratcliffe demanded Rodríguez to ensure Venezuela is no longer a “safe haven for America’s adversaries, especially narco-traffickers.” But this requires eliminating the shadow economies that have largely sustained the regime. As oil output collapsed by about 90%, it has been demonstrated that the regime has pivoted to illicit enterprises—along with the regime’s acquiescence to criminal groups in their territory. Illegal mining and drug trafficking, for instance, have reportedly accounted for over a quarter of Venezuela’s economy.

The Trump administration’s eagerness (or impatience) over reforms in Venezuela, plus its immense leverage and willingness to exercise it, may eventually make it realize the need for a swift and credible timeline for re-institutionalization and electoral reform.

Furthermore, China has become the regime’s primary economic patron, absorbing sanctioned crude. With the US interdicting shadow-fleet vessels in the Caribbean and demanding a severance of ties with Beijing, regime insiders—particularly the military, which controls critical pillars of domestic oil production and gasoline distribution—now face unprecedented structural strain. The security apparatus is similarly entangled with Russia, a partner that occupied key strategic voids left by the US and provided the military with hardware and gray market financial networks. These networks will not disappear overnight. Trump’s demand for a strong severance from illicit and foreign ties will likely be a turbulent process.

Complying too strongly with Trump will likely require Rodríguez to cut off many of the elites—and their related structures—that, by enriching the regime, have averted threatening crises for over 20 years. Complying too little with Trump to avoid overhauling internal-regime mechanisms, however, risks the ire of a Trump administration that has staked significant political capital on Venezuela’s transformation, especially in a critical election year.

Will the regime, as María Corina Machado suggested, “be forced to dismantle itself”? While not ensuring democratization, altering survival mechanisms to avoid the fate of Maduro could open junctures towards political liberalization. Conversely, prioritizing elite loyalty and existing mechanisms of enrichment over US expectations of reform and improvement risks unilateral dislodgment. While neither path guarantees democracy in the short term, the Trump administration’s eagerness (or impatience) over reforms in Venezuela, plus its immense leverage and willingness to exercise it, may eventually make it realize the need for a swifter and credible timeline for re-institutionalization and electoral reform.

Amidst this uncertainty, rather than a narrative of Delcy’s uncontested longevity, the politics of post-Maduro Venezuela suggests that the possibility of critical junctures favoring a transition toward democracy remains, today, more resonant than ever.

After months of intense negotiations, the European Commission concluded on Tuesday a free-trade deal with India which sharply reduces tariffs on EU products from cars to wine as the world looks for alternative markets following President Donald Trump’s tariff hit.

The announcement was made during a high-level visit by European authorities including Commission President Ursula von der Leyen. Both countries hailed a “new chapter in strategic relations” as the two looks for alternatives to the US market.

India is currently facing tariffs of 50% from the Trump administration, which has severely dented its exports. After sealing the Mercosur deal with Latin American countries earlier this month, the EU has said it aims to speed up its trade agenda with new partners.

“We did it – we delivered the mother of all deals,” von der Leyen said after the deal was announced. “This is the tale of two giants who choose partnership in a true win-win fashion. A strong message that cooperation is the best answer to global challenges.”

Talks went down to the wire with negotiators meeting over the weekend and in the early hours of Monday. The deal says it will bolster the “untapped” potential of their combined markets but did not include politically sensitive sectors such as agriculture.

The EU’s powerful trade chief Maroš Šefčovič, who in charge of negotiating on behalf of the 27 EU member states, said Brussels aims for a fast implementation by 2027.

In an interview with Euronews from Delhi after the deal was announced, Šefčovič said the India deal showcases the EU’s new approach when it comes to trade: more pragmatic on deliverables, rather than getting stuck on political red lines.

“We resumed negotiations with a new philosophy, being very clear in saying: if this is sensitive for you, let’s not touch it,” Šefčovič told Euronews, describing the strategy as a gamechanger.

A win for European exports looking to tap Indian market

Under the agreement, the EU aims to double goods exports to India by 2032 by cutting tariffs on approximately 96% of EU exports to the country, saving around €4 billion a year in duties. At its full potential, the deal creates a market of 2 billion people.

Europe’s carmakers emerge as beneficiaries, with Indian customs duties gradually reduced from 110% to 10% under a quota system. Tariffs in sectors including machinery, chemicals and pharmaceuticals will also be almost entirely eliminated.

Wine and spirits, key exports for countries like France, Italy and Spain, will see duties reduced from 150% to around 20 to 30%. Olive oil duties will be cut to zero from 40%.

After years of tensions with EU farmers, the Commission said sensitive agricultural products had been excluded from the agreement, leaving out beef, chicken, rice and sugar.

When it comes to India, the agreement keeps trade terms on dairy and grain untouched in line with the demands of the Indian authorities, which saw it as a red line.

The Commission, which negotiated the deal on behalf of the EU’s 27 member states, said it included a dedicated sustainable development chapter “which enhances environmental protection and addresses climate change.”

The agreement does not cover geographical indications, another contentious area for negotiators, which will be addressed in a separate deal aimed at protecting EU products from imitation on the Indian market.

Deal cut under pressure from Trump’s tariffs

The timing of the deal is important as the two sides look to de-risk their economies from the threat of Trump’s tariffs.

The EU saw tariffs triple to 15% last year under a contentious deal and India is currently operating under a 50% tariff regime from Washington.

The Trump administration slapped an additional 25% duty on India last year as punishment for buying Russian oil, which India has defended citing a need for cheap energy to power a country of 1.4 billion people.

Talks between the EU and India first began in 2007 but quickly ran into hurdles.

Negotiations were relaunched in 2022 and talks intensified last year as the two sought to cushion the impact of Trump’s return to the White House.

After the deal was signed during a two-day trip on Tuesday, in which the chiefs of the Commission and the European Council were guest of honour, the EU said the deal showcases that “rules-based cooperation” remains the preferred path for the bloc – and a growing number of partners from Latin America to India.

Before the deal can be implemented, the European Council and the European Parliament will have to ratify it, which can become an arduous process.

The Commission hopes to begin implementing the agreement from January 2027.

This story has been updated with comments by Commissioner Šefčovic to Euronews. Watch online and on television.

The release of Rafael Tudares, son-in-law of president-elect Edmundo González Urrutia, should not be read as an act of goodwill or as evidence of political normalization. It tells us something else. It tells us that the Venezuelan regime is operating under constraints it does not fully control anymore.

Political prisoners were never hidden, and they were never quiet. Everyone knew they existed, and everyone knew what they were for. For years, they generated exactly what the regime wanted, instilled fear, and discouraged people from testing the limits. That logic held, especially after the astronomical repression that followed July 28, when the government made a point of showing that even the smallest act of dissent, printing T-shirts, organizing vigils, speaking too loudly, would be punished.

What has changed is not the visibility of repression, but its effectiveness. For much of the last decade, political imprisonment functioned as a kind of currency. Detainees were bargaining chips, reminders that the state answered to no one, signals that consequences were final. That system depended on a relatively closed circuit of authority. Decisions were made internally, enforced vertically, and rarely explained. As long as that circuit held, repression worked not because it was subtle, but because it was definitive. Detention meant disappearance, uncertainty stretched over months or years. Tudares’ year-long disappearance is a good example. It produced exactly the reaction the regime expected, a broad recalculation of risk, fewer protests, more caution.

After Maduro’s removal, that circuit did not disappear, but became weaker. The regime did not stop repressing. It still , still intimidates, still punishes, more than 700 political prisoners remain unjustly detained. But it no longer does so from a position of uncontested control. It no longer acts as if it answers only to itself. Increasingly, it has to answer outwardly, and upward.

This is where Donald Trump enters the picture. Whatever one thinks of the arrangement taking shape, Caracas no longer governs in isolation. Trump’s own allies, many of them already uneasy about leaving figures like Delcy Rodríguez and Diosdado Cabello in positions of power, have grown increasingly uncomfortable with a slow, opaque process in which hundreds of political prisoners remain behind bars. In that context, prolonged detention no longer signals strength. It starts to look like defiance without cover. The White House at some point will wonder when do Venezuela’s political prisoners begin to look like Trump’s political prisoners?

That shift matters at home as well. Fear hasn’t disappeared, but it no longer dominates everything. Students are back in the streets, political figures are reemerging from hiding. Even the so-called colaboracionistas seem to be reassessing how much silence is worth. The question is no longer whether repression is real, but whether it’s still decisive.

Tudares’ release wasn’t the regime executing a plan. It was a reaction, in a context where the regime seems to have lost some control over political timing. More revealing still, it was a reaction through intermediaries, not institutions.

The speed and manner of Tudares release make this hard to miss. What followed the surge of public scrutiny around figures like former Fedecámaras president Ricardo Cusanno and Caracas Archbishop Raúl Biord was not a drawn-out negotiation or a carefully managed announcement. It was fast, happened within hours, in the middle of the night, and outside of formal institutions, and perhaps, more strikingly, it came with no explanation. That sequence matters. It suggests the system did not need time to think. It needed a release valve. That reaction was triggered when Mariana González de Tudares published an explosive statement pointing to several actors allegedly involved in the release of political detainees after the 2024 post-electoral crackdown.

Midnight decisions, diplomatic handoffs, releases carried out quietly and offstage are rarely signs of confidence. They are about containment. This was not the regime executing a plan. It was a reaction, in a context where the regime seems to have lost some control over political timing. More revealing still, it was a reaction through intermediaries, not institutions. Tudares was not released publicly from a detention center. No senior official stood next to him. No one wanted to own the decision.

That does not mean the regime suddenly became fragmented, as it was always dispersed. Different security bodies and political actors have long controlled different sets of prisoners. That dispersion is one reason releases have historically been slow and uneven, with individual detainees effectively tied to specific figures. What makes this episode different is that someone gave in quickly, and did so without wanting to be seen doing it.

This was not an assertion of authority, the decision was fast, and the execution was evasive. It reads more like damage control. A concession made quietly, designed to minimize visibility and avoid setting a precedent in daylight. The release of Rafael Tudares looks less like sovereignty and more like containment, a move taken not because it fits a strategy, but because delay had become riskier than action.

The regime’s weakest points are not at its core, but at its edges, among the intermediaries who must explain, manage, and deflect on its behalf.

What this reveals is not confusion about who holds power, but clarity about where pressure works. The regime did not need agreement on principle. It needed someone to absorb the cost, quickly, and without fanfare. That is the behavior of a system that understands its own exposure and is governing less through displays of strength and more through tactical retreats.

For the opposition, this matters. It shows that the regime is more exposed to public pressure than it has been in years, not because it has lost the capacity to repress, but because it has lost its monopoly over timing, narrative, and accountability. As explored in “María Corina vs. the Realpolitik of Trump and Delcy,” Machado is operating in a narrower, more brittle political landscape. The Tudares episode suggests that this landscape does not absorb pressure well. When scrutiny becomes public, targeted, and reputational, outcomes can be forced quickly and awkwardly.

Political prisoners have become a liability not because they are invisible, but because they are contested. They no longer function as a one-way threat. They sit at the intersection of domestic mobilization, international pressure, and reputational risk. The regime still represses. What it no longer fully controls are the consequences.

This does not mean collapse is imminent, but signals something more practical. The regime’s weakest points are not at its core, but at its edges, among the intermediaries who must explain, manage, and deflect on its behalf. When those actors are exposed, when delay becomes more costly than action, results can come fast. The release of Rafael Tudares should not be mistaken for closure. It shows that the fear-based equilibrium that sustained the system for years is wearing down, and that public pressure, when aimed correctly, now moves faster than authority. That is not a victory, but it is useful knowledge.

Politics can move too fast for few and too slow for many at the same time. Today is a perfect example of that. The brand-new Rodríguez regime seems quick at aligning with the Trump agenda, executing the sort of authoritarian due diligence needed to attract foreign investment and make things favorable for looming corporations. Yesterday they used a completely dominated National Assembly (one that neither admitted anything close to a debate nor disclosed the texts through official channels) to advance three legal initiatives related to doing business in the country. The non-chavista, systemic opposition group there led by Henrique Capriles and Stalin González decided not to take a stance. The parliamentary agenda included amending a massive energy-sector statute that could change the game for those aiming to become main oil-industry players.

But now it’s January 23^rd. The most significant date for the country’s democracy legacy tastes bittersweet, carrying hints of frustration and even despair, but also of opportunity. The collapse of the Marcos Pérez Jiménez regime exactly 68 years ago represents the complete opposite of the type of political shifts we’ve witnessed since January 3, 2026. In 1958, after some turbulent weeks marked by protests and a failed military uprising, mid-level Army officers rose to topple the Pérez Jiménez regime and dismantle its entire repressive structure. The dictator and his infamous repressor-in-chief managed to escape the country unharmed (though the story doesn’t end there for the former). And in stark contrast to what many of our neighbors were enduring, the armed forces became a key actor in promoting a civilian-led democratic order that began to take shape in the following months. Wolfgang Larrazábal, the military figure who oversaw that process, became an icon of Venezuela’s democratic transition.

What we have after January 3rd, however, is the exact opposite. An external force removed the dictator and his wife, not a group of generals acting in the people’s interest. The shambolic state of the military was laid bare before the eyes of the world, a defenseless, even invisible, force that couldn’t even scratch a group of American helicopters. Crucial difference: the rest of the regime remains in place, including the entire repressive apparatus. Notwithstanding, the ruling Rodríguez faction announced the start of a “significant” release process of detainees days after that “Deus ex machina” moment that raised hopes of a Caribbean-style glasnost. Two weeks later, about 15% of political prisoners have walked out. The regime has conducted this in a way that prevents celebration: dropping prisoners in specific spots of the city rather than right in front of the gates, sending them straight to airports (which happened to Rocío San Miguel), and gaslighting the public about the actual figure. Regime officials including Jorge Rodríguez and Tarek William Saab repeat they’ve released 400 political prisoners. Rights watchdog Foro Penal has so far verified 155.

In Caracas, they were careful not to disturb traffic or make chants that would upset the police or chavismo itself, such as calling for presidential elections, Delcy’s removal, or explicitly invoking the July 28 mandate.

In defiance, families of political prisoners have been camping outside prisons and torture centers for two consecutive weeks. Two leading Catholic priests have stood alongside them, which is particularly meaningful following a recent accusation against the Archbishop of Caracas of being too close to the regime. Two veteran anti-chavista politicians, Andrés Velásquez and Alfredo Ramos, have shown their faces after going into hiding since August 2024, when Maduro & Co. went after every real and made-up opponent following the July 28 presidential election. Today, campuses in at least seven universities across the country (ULA, LUZ, and USB, to name a few) woke up with banners calling for the freedom of all dissidents and the closure of prisons for regime opponents. 

Universidad Central student leaders organized a protest next to the capital’s main highway to honor today’s anniversary. Akin demonstrations took place in other parts of the country, such as Zulia, Mérida and Barinas. In Caracas, they were careful not to disturb traffic or make chants that would upset the police or chavismo itself, such as calling for presidential elections, Delcy’s removal, or explicitly invoking the July 28 mandate. Activists from PROVEA, trade union representatives and other human rights groups joined the students (who, by the way, have been quite active supporting families of detainees outside El Helicoide and the National Police jail in Boleíta). They released a joint statement. This is the core message:

We affirm that the “new political moment,” based on “reconciliation and reunion,” announced by the administration now headed by Delcy Rodríguez, will not be viable as long as urgent public demands remain unaddressed.

We believe that the most urgent demand, one that unites society as a whole, is the full, unconditional, and immediate release of all those who have been arbitrarily deprived of their liberty or subjected to judicial proceedings for political reasons, and who remain unjustly held in prisons and police stations across the country.

This won’t be enough to shake the nascent Rodríguez-led dictablanda and force comprehensive concessions. Sustaining such pressure requires time and careful coordination with party structures and the wider Venezuelan population. But it is, without a doubt, a more than decent way to push for political freedoms on this weird, confusing anniversary. The sort of freedoms that other foreign stakeholders have been, and will continue to be, slower to demand.

The BoJ held off on hiking its headline rate on Friday as expected, following signs of panic in Japan’s bond market this week.

Just last month, the Japanese central bank raised its key interest rate to 0.75%, a 30-year high, in a bid to normalise fiscal policy after a long era of near-zero or negative rates.

In its latest update, the BoJ also lifted its GDP growth expectations for 2025 to 0.9% and to 1% for this fiscal year. Both figures represent an increase from the 0.7% forecasted previously.

The decision to hold allows the Japanese economy to digest the December hike but it does not fully address the fear that spooked global markets this week, namely surrounding Japan’s national debt and political instability.

This Tuesday, Japanese bonds suffered a historic rout, with the yield on the 40-year note surpassing the 4% mark for the first time since 2007. The 30-year bond yield also rose almost 30 basis points during the session, to roughly 3.9%, the highest level on record.

The catalyst for the sell-off was Prime Minister Takaichi’s announcement on Monday that snap elections will be held on 8 February, and the pledge to suspend the 8% consumption tax on food for two years, in an attempt to woo voters.

The annual revenue from the tax is roughly ¥5tr (€31.5bn), and with markets already concerned about Japan’s debt-to-GDP ratio hovering near 240%, the highest in the developed world, the prospect of an unfunded tax cut has become controversial.

Prime Minister Takaichi also unveiled a spending package of roughly ¥21.5tr (€115bn), further fuelling criticism of fiscal recklessness.

These domestic policy decisions have drawn uncomfortable comparisons to Liz Truss’s disastrous “mini-budget” of unfunded tax cuts in the UK, back in 2022.

Politics vs. Economics

Sanae Takaichi took office in October 2025 becoming Japan’s first female prime minister, following the resignation of her predecessor, Shigeru Ishiba, after a series of political setbacks.

Takaichi’s party, the ruling right-wing Liberal Democratic Party (LDP), lost its majority in the upper house. The long-standing coalition with the centrist party, Komeito, which withdrew over a political funds scandal, collapsed.

Nonetheless, the LDP formed a new coalition with the centre-right Japan Innovation Party (JIP), and under Takaichi’s leadership, it has held a slim majority and enjoyed high approval ratings, particularly among young voters.

The ruling coalition now aims to leverage Prime Minister Takaichi’s popularity in the snap elections to lock in a fresh mandate.

During her speech this Monday, Takaichi proclaimed: “I am putting my position as prime minister on the line. I want the people themselves to decide whether they are willing to entrust Takaichi Sanae with the task of running our nation.”

Takaichi’s opponents merged at the start of this year, forming the Centrist Reform Alliance (CRA), and are trying to capitalise on voter anger over the cost of living.

The proposed food tax cut was Takaichi’s ace in the hole, a direct transfer to households struggling with inflation. Instead, it has so-far backfired, driving up mortgage rates and corporate borrowing costs via the bonds.

The “Abenomics” ideology, the loose fiscal and monetary policy championed by Takaichi’s mentor, the late Shinzo Abe, supports the narrative that an inflationary spike may be brewing. The CPI rate has already hovered above the central bank’s 2% target for four years.

Even so, volatility seemed to have somewhat subsided on Thursday as government officials talked down the panic, with Chief Cabinet Secretary Minoru Kihara insisting the administration is “keeping a close eye” on bond movements.

However, the yield on the 10-year government bond is still at its highest level since 1999, at around 2.25%.

Impact on global markets

Fears of a ballooning deficit, just as the BoJ is tapering its decades-long bond-buying programme, have severe implications for global markets.

For many years, investors worldwide have enjoyed the so-called “yen carry trade”. This is a strategy of borrowing money in Japanese yen, which typically has very low interest rates, to invest in assets denominated in currencies with higher returns, like US dollars.

Investors profit from the difference, or the “spread”, between the low interest they pay on the loan and the high interest they earn on the investment.

Conversely, if the Japanese yen suddenly strengthens or the BoJ raises interest rates, the cost of repaying the loan spikes, often forcing investors to panic-sell their assets to cover their debts.

The rout that Japanese bonds experienced on Tuesday also forced a violent repricing in other markets throughout the following days, causing US Treasury yields to jump.

The US is particularly affected as Japan is the largest foreign holder of their debt, with over $1tr (€850bn) in US Treasuries.

Speaking at the World Economic Forum in Davos this Wednesday, US Secretary of the Treasury, Scott Bessent, stated: “It’s very difficult to disaggregate the market reaction from what’s going on endogenously in Japan.”

Secretary Bessent also completely dismissed the idea that the “Greenland crisis” was responsible for any volatility in US markets, emphasising that the primary pressure remains the fiscal shift currently unfolding in Tokyo.

Prime Minister Takaichi’s policies involve massive government spending to stimulate economic growth which fans inflationary risks. This could ultimately mean further hikes from the BoJ and more unwinding of the yen carry trade.

It is too early to say that things are settling at The Branch, the hostile takeover by Corporate left some ripples and management is scrambling to adapt. For the moment, we can say that the status remains “fluid.” We’re not at a place yet where the branch manager can fire the annoying janitor that’s been around for decades and seems to have more power than he should, but at least she’ll be able to change that old pot that makes cockroach tasting coffee for a proper Nespresso.

That’s where we are. Por ahora, Venezuela seems to be stuck in a corporate takeover by the US government. And like any corporate takeover it’s natural that the target’s management will be jittery, but at the same time trying to stick to their old ways, the “this is how we do things here” attitude that lasts until Corporate reminds them that “how we do things here” is what landed them in this position in the first place. Regardless, management has to calm the staff, who are hoping that things will remain somewhat the same, although deep down they know they’re not.

I’m not going to hold the analogy throughout the whole piece, but rather ramble in and out of it as it comes. The point is that the Venezuela strategy is currently detached from a democratic logic (por ahora), and it may be more oriented to results on a spreadsheet. I’m not saying this just because Donald Trump is a businessman and the first thing they’re tackling is the oil business while he talks about how profitable this whole thing will be, but also because they are approaching the situation just how you would approach the expansion of a business. And branch, dare we say, not subsidiary, since there’s little to no independence on how this business is being run.

Delcy Rodríguez and her brother Jorge, have been keeping the house together for a while. Delcy has been the executive part of The Branch since before it was a branch and Jorge a key strategist and negotiator for the organization. We’ve said before that even when the regime has had the dictatorial tumbao since forever, and that democratic institutions where thrown out the window many years ago, they did have a certain degree of separation of powers caused by the death of Hugo Chávez (who did concentrate all powers). Bout of course, not separation of powers how it was taught in political institutions classes (executive, legislative and judicial), but more into chavista factions (executive, Diosdado, and the military). That separation of powers maintained a certain balance, if you saw it from a chavista logic. The executive, under Maduro and Cilia Flores, not only concentrated the powers of the presidency but a big chunk of the judiciary (in Cilia particularly). Delcy Rodríguez’s role in this structure was, actually, executing almost all of Maduro’s functions and many other roles delegated in her (in a way, Delcy was the Rubio to Maduro’s Trump).

The military in the post Chávez era has always been its own mega bureaucratic, too big and too divided to move behemoth, focused on wealth and politics, that has the legendary power to change things in the country at a snap of its fingers, but that won’t do it because it is too big and too divided.

For a long time, Diosdado stood his ground in the legislature because of his influence over the party. He was able to hold leverage over the “executive” by blocking certain legal initiatives, like one touted reform of the Hydrocarbons Law that had been requested for ages by Russia, China, Iran, and the United States. Then, after the 2024 presidential elections, when this structure started losing balance, Diosdado accumulated more power when he became Venezuela’s top cop—in command of a force that probably has more experience and is more combat ready than the military.

After Maduro’s extraction, this balance broke. Chavista politics and separation of powers out the window. The military sent to the barracks and the Rodríguez siblings forced to play nice with Diosdado (and viceversa) por ahora. The chain of command disolved into a single line between two speakerphones. Tyranny.

Welcome to the corporate world.

While adjusting to this new reality hasn’t been easy, The Branch has been understanding some basic rules based on efficiency and celerity required by Corporate. In just a week, after Exxon CEO Darren Woods voiced concerns over the legality of PDVSA’s current contractual framework, the lack of resources to protect investment in Venezuela, and the complications to carry out regular business activities, the National Assembly presided by Jorge Rodríguez “discussed” for immediate approval in first discussion three pieces of legislation provided by the branch manager (Jorge’s sister, it’s a family business!): the hydrocarbons law, which doesn’t only legalize the aforesaid contractual framework but also adds alternatives to solve disputes beyond Venezuela’s courts; a Socioeconomic Rights Law; and an anti red tape law. This first law packet should be fully approved and entering into force within the week. Easy peasy.

Mr. Trump, please tell Mr. Woods that his request should be fulfilled shortly.
Best,
Delcy R.

Also, part of the funds from the first batch of oil sold via the US has already been injected into the financial system, partially stabilizing the foreign exchange market and liberating crude storage space. Delcy also started making some cabinet changes, nothing major yet, she’s still keeping the people she trusts close, and giving some space to Cabello, but she got rid of Alex Saab—it’s not hard to please the boss when you get to do something you really wanted to do in the first place.

Staffing has been at the core of this takeover. A Reuters headline yesterday read: Trump considers role in Venezuela for Machado. While we don’t see yet that Corporate will Machado to supervise Delcy, we’re at such a dry spot right now, that Trump decides whether the most popular politician in Venezuela can participate or not in… What? Can it even be called a transition? What is it? We argued in a different post that beyond the ruckus that Machado’s involvement may cause in Venezuela in this moment, Trump is just happy on how Delcy has been delivering. His weekly reviews all include gold stars. Versus what could mean having to deal with a leader “constrained and empowered by a democratic mandate” and an actual obligation to the Venezuelan people.

That’s why the easy part is starting with the business stuff. Getting to the core of the organization is the hard part. We’ve seen many comments on how the first thing that has to be done in order to actually entice investors to come into Venezuela is to work on its democratization and fixing its institutions (not entirely true). We can discuss about democratic principles all you want, but it’s just not going to happen that way, even when it would be the most desirable option. It’s just not the path we’re on. Corporate decided to “fix” the business first, because they want to see profit, they want to see that it’s worth it. And perhaps, by working their way from the outer shells of the business, eventually, maybe, getting to the core of the issue: the need for re institutionalization and getting democratically elected leaders to replace the branch management. While there’s a very slim chance of this happening, democracy would have to seep through a crack of the business shell into the core, it may be the only chance. Not that the takeover method was correct or ethical, but no one else would’ve been crazy enough to put in the investment. And again, it’s the reality that we’re in and that’s what we have to deal with.

Timing, not time, is one of the big challenges here. Corporate needs to keep oversight and control for just the right amount of time, taking into account that there’s a big chance to get pushback from the branch management when trying to impose a new system, if they take too long, let’s say… November, the chance may be lost and branch management will sit comfortably and sooner than later go back to their old ways. Just look at how they’ve been handling the “good faith” gesture of political prisoner release. Yes, they’ve been complying, but there’s been resistance, lies and treachery.

And then there’s the issue of Cabello himself. It’s hard to see a democratization process with him, his special forces, and his colectivos around. We don’t see it. Big oil doesn’t see it. The region doesn’t see it. And perhaps, at some point, Corporate won’t see it too.

Sadly, at present, bringing Venezuela back to democracy requires more than the will of Venezuelans. Of course that part is key, but right now we mostly depend on the good heart of men in a board room looking at excel sheets. Or just wait for the numbers on those excel sheets to spell “democracy.”

In a country like Venezuela, the Hydrocarbons Law is the legal instrument that defines the rights and obligations of the State and the private parties, pursuant to the constitutional principles. There are two things to have in mind on the Venezuelan Constitution of 1999: oil reservoirs are the sole property of Venezuela and Petróleos de Venezuela, S.A. (PDVSA) cannot be transferred or sold to private parties. 

The Hydrocarbons Law of 2001 (amended in 2006) allows private participation in exploration and production activities through joint ventures (empresas mixtas).  These joint ventures are under the operational control of the Venezuelan State (i.e. PDVSA) and are considered state-owned entities in accordance with the Public Administration Law of 2014. The Hydrocarbons Law limits private participation in exploration, production, and commercialization activities of liquid hydrocarbons and associated natural gas. Other regulations enacted sometime after restrict private participation in a number of other issues, such as the performance of certain services agreements.

Right at this moment there seems to be an initial consensus among the political and economic actors on the need to have a renovated legal framework for the oil industry, for the purpose of enabling new investments and boosting oil production. Because when things are not working well in a strategic and major industry, some legislative action is desired.

Delcy Rodríguez, who took over after the extraction of Nicolás Maduro, mentioned the matter in her address to the National Assembly on January 15^th, announcing partial reforms in the oil sector. At the time of writing, we’ve not had the possibility to review the draft bill. As a result, we haven’t figured out yet where this reform is heading. But we do know what Rodríguez said in her speech, calling for the incorporation of the productive models outlined in the Anti-Blockade Law of 2020, thus, allowing investment flows into new fields. The reform of the Hydrocarbons Law is now considered a priority in the extensive 2026 legislative agenda of the National Assembly, and no one is talking about the National Assembly giving an enabling law to the acting President to grant her the legal power to pass legislation.

In the event that private investors own a majority of the stake in the joint ventures under the new Hydrocarbons Law, the end-result would be that they will no longer be considered Venezuelan state-owned entities.

The Anti-Blockade Law was conceived as a response to international economic sanctions against Venezuela. Without a doubt it has promoted private investments in the country. But for various reasons, this statute has not attracted enough interest from investors. Some argue that its provisions are in collision with the ones set forth under the Hydrocarbons Law. It is also feasible that if the economic sanctions are lifted in the future, the Anti-Blockade Law will lose significance.

Key questions

So, in our view, there are key questions for the new hydrocarbons legislation. First, what will happen to existing joint ventures between PDVSA and Eni, Chevron, CNPC, Repsol, Maurel & Prom, and Roszarubezhneft—among other current players? We don’t know for sure if private investors will be allowed to become majority shareholders in these existing joint ventures or whether there will be a different contractual scheme.

We also ignore what will happen to new joint ventures in terms of private investors’ participation, or about the existing contracts on production, signed in recent years between PDVSA and private investors in accordance with the Anti-Blockade Law. Such contracts might be converted to production sharing contracts, services at risk contracts or other types of contracts. Private investors or joint ventures might be entitled to commercialize liquid hydrocarbons, associated natural gas, and/or by-products.

Another aspect to consider in new legislation is oil royalties, how flexible they will become, with distinctions between greenfield and brownfield projects. Will the government’s take be reduced, and the income tax lowered with the amendment of the Income Tax Law as well? Will there be any tax breaks for new investments?

In the event that private investors own a majority of the stake in the joint ventures under the new Hydrocarbons Law, the end-result would be that they will no longer be considered Venezuelan state-owned entities, as such entities are defined under the Venezuelan legal framework. Furthermore, in this case such joint ventures will not be subject to the 50% OFAC rule, which predicates that any entity directly or indirectly owned 50% or more by PDVSA is automatically deemed sanctioned and blocked, even if not explicitly listed by OFAC, prohibiting US persons from any transactions with that entity.

The weight of experience

The truth is that Venezuela has an extensive, complex, and valuable experience in dealing with oil projects and private investments for more than a century. We have to learn from past lessons, if history has any relevance at all. 

Three milestones should be mentioned in Venezuelan oil history: the Hydrocarbons Law of 1943; the Oil Nationalization Law of 1975; and the migration process to mixed joint ventures of 2006-2007, supported by the Hydrocarbons Law still in force. 

In 1943 occurred the convalidation of concessions defects and the conversion of all existing concessions to new ones under a new single legal framework. In 1975 the foreign oil companies were given the opportunity to sign technical assistance agreements and commercialization contracts with the recently created PDVSA, following their compensation. In 2006-2007 the private companies with operating services agreements, strategic associations, and profit sharing agreements were given the chance to migrate to joint ventures as minority shareholders. 

There will be better chances to attract these investments if the reform provides fiscal benefits, regulatory advantages, and favorable contractual schemes.

In all those processes, with greater or lesser success, the intended purpose of Venezuela was focused on keeping the relationships with the oil companies, with all the pros and cons that those decisions entail. 

Today there is little certainty about which legal instrument will be sanctioned by the National Assembly, and which private companies will decide to invest in the country. The only certainty is that the reform will not hinder private investments, it will promote them. In this sense, the companies already in the country have an advantage over those that are beginning to put their technical and legal teams together to make their first evaluations and studies. 

In order to have massive investments in the oil sector, an important reform of the Hydrocarbons Law is definitely the first step going forward. There will be better chances to attract these investments if the reform provides fiscal benefits, regulatory advantages, and favorable contractual schemes. Nonetheless, any reduction of the government stake to attract investments will require the modification of the Income Tax Law as well. 
The technological, human, and financial resources for the industry will hopefully come in great numbers and capabilities to Venezuela following the enactment of new legislation. The economic and legal challenges for the Venezuelan oil industry are huge and must be treated with a sense of urgency for the benefit of the country and its people.

Global stock markets rallied on Thursday as US President Donald Trump rolled back tariff threats linked to Greenland.

Attending the World Economic Forum’s annual summit in Davos, Switzerland, Trump said he had agreed the “framework of a future deal” on Greenland after meeting with Mark Rutte, NATO’s secretary-general.

The president claimed he would not use military force to seize the island from Denmark, and also dropped plans to impose extra tariffs on European countries from 1 February.

Details of the future deal are scarce, although investors were visibly cheered by the de-escalation.

Just after the opening bell in Europe, France’s CAC 40 traded 1.31% higher, Germany’s DAX saw a 1.23% lift, Spain’s IBEX 35 was up 1.05%, while Italy’s FTSE MIB rose 0.97%. The UK’s FTSE 100 traded 0.76% higher, while the wider STOXX Europe 600 was up 1.15%.

A global boost as tensions ease

The optimism in Europe mirrored movements in Asian markets, with Japan’s Nikkei 225 rising 1.73%, China’s SSE Composite Index up 0.14%, and Australia’s S&P/ASX 200 up 0.75%. Hong Kong’s Hang Seng drifted less than 0.1% higher, while South Korea’s Kospi saw a 0.87% boost, breaching the 5,000 mark for the first time and closing at a record 4,952.53.

Over the last 12 months, the Kospi has emerged as the world’s best-performing index on the back of the AI boom, with South Korea home to pivotal chipmakers Samsung Electronics and SK Hynix.

Semiconductor firms, which are already highly valued, saw their stocks climb even further after Nvidia CEO Jensen Huang spoke at Davos on Wednesday. Huang claimed that the AI transition would require trillions of dollars of investment, easing fears around overvaluations — at least for now.

The Philadelphia Semiconductor Index, which tracks 30 US semiconductor companies, closed 3.18% higher on Wednesday.

Looking at broader US sentiment, S&P 500 futures traded 0.40% higher, Dow Jones futures were up 0.20%, while Nasdaq futures rose 0.64%.

Gold and US Treasuries

As EU-US tensions eased, demand for safe haven assets slid.

As of around 9:30am CET, gold traded 0.19% lower at $4,828.30 per ounce — following a record high of over $4,800 reached on Wednesday.

The metal’s popularity is linked to its liquidity and status as an inflation hedge, but a weaker dollar and falling US interest rates have also boosted bullion.

When the greenback falls in value, this makes gold comparatively cheaper for foreign buyers and therefore drives up demand and prices. Low US interest rates also increase gold’s appeal compared to interest-bearing assets, as investors aren’t significantly losing out if they choose the metal over assets like bonds.

The Dollar Index, which tracks the greenback against six other currencies, traded less than 0.1% higher at 98.81 on Thursday.

Yields on long-term US bonds also slid after a spike earlier in the week, linked to Greenland tensions and threats to Federal Reserve independence as Trump prepares to name a new chair. Another reason for the earlier yield spike is volatility in Japan, with some investors moving money away from US assets into higher-yielding Japanese debt.

In the days ahead, markets will be watching for more details on Trump’s Greenland deal, as Denmark has stressed that the island’s sovereignty is not up for negotiation. An emergency summit between EU leaders will take place in Brussels on Thursday to address the US threat.

After a dawn briefly interrupted by the explosions of missiles fired from MH-60L helicopters, there was a silence greater than the one traditionally accompanied by the crickets in Caracas: uncertainty about what the target had been. Social media users posted different images from their homes in which the fires resulting from the explosions rose in columns of uncertainty.

That uncertainty lasted a few hours, initially with a statement from the Foreign Ministry stating that Nicolás Maduro, in the exercise of his duties, had activated all the necessary defense protocols and plans to protect the nation, while also announcing the state of national emergency. Hours later, through a voice note recorded by Vice President Delcy Rodríguez, it was announced that the whereabouts of Nicolás Maduro and Cilia Flores were unknown. At the same time, Defense Minister Vladimir Padrino López warned of a further escalation of violence, said that the attacks had included civilian sites, and called for the consolidation of a wall of resistance made up of civilians and military forces in the face of the “invasion.”

A wall that no one saw erected before, in his statement from his Mar-a-Lago resort, Trump said that cordial talks had been established with Delcy Rodríguez and that she was completely willing to work. A microphone became a dagger for the official narrative in less than 24 hours. Since July 28, 2024, the government’s ability to manage the media agenda had been undermined by a “data-beats-narrative” premise, which was validated by official voting records. Any attempt at explanation was no longer credible. Dissociation became a way of continuing to govern without legitimacy.

Since January 3, the Venezuelan government has had to juggle between showing that there is collaboration with the US and defending two central figures, such as Maduro and Flores. “It’s nothing personal, it’s just business” is one of the lessons that chavismo seems to have learned from Michael Corleone. As of today, even the son of Nicolás Maduro (“Nicolasito” Maduro Guerra) has said that he feels it’s necessary to reopen the US embassy in Caracas and even the Israeli one, which was closed long before.

Jorge Rodríguez: “If we are going to promote peaceful coexistence, we have to rectify, we have to look for mechanisms where there is calm (parsimonia), engagement (encuentro), and where we can tone down the arrogance (soberbia) a bit, but you (the opposition) have to tone down the pettiness (mezquindad).”

While the chavista leadership seeks to please the interests of the Trump administration and position itself as an indispensable ally for foreign investment, the grassroots support of the ruling PSUV party chants and performs choreographies on social media saying that it will rescue Maduro and Flores from an “illegal” imprisonment. In the meantime, it is at least interesting that those regime groups that have the most to lose from this sudden rapprochement with Washington are the most loyal ones, while the leadership in Caracas receives the CIA director.

Watching a spokesman as radical as Diosdado Cabello say that he wants the opening of the Venezuelan embassy in Washington is a sign that something has changed. In his words: “We are not afraid to sit down and talk to whoever we have to talk to. Doubting is betrayal. Unity turns us into a single body, there are no free agents here.”

Cabello has also accepted the (very slow and selective) release of political prisoners in these terms: “It has to do with a process of national reconciliation that the acting president has announced. Those who have cases of drug trafficking, rape, attacks on children, and murder are excluded.” But neither repression nor the verbal attacks on NGOs have ceased. Not even by Jorge Rodríguez, who on January 13 said that Foro Penal were petty and self-interested. Cabello said that “the so-called NGOs are charging families, saying that detainees are released thanks to them. Thanks to them? If NGOs do anything, it’s to slander detainees, because they receive money from abroad.”

Meanwhile, the “workers’ president” now shares prison with the world’s most famous criminals. Chavismo can try to turn the man who ordered mass kidnappings into a poor hostage of the US imperialism, while Delcy says that if she has to go to Washington, she will do so accompanied by the spirit of a brave people. The most reasonable scenario is that the legal battle over Maduro’s release will take years, along with an artificial anti-imperialist narrative.

Cabello tries to compensate for the impact of January 3 by claiming that nothing has really changed.

The Rodríguez siblings have already toned down the level of conflict. Addressing non-chavista lawmakers in the National Assembly, Jorge Rodríguez said: “If we are going to promote peaceful coexistence, we have to rectify, we have to look for mechanisms where there is calm (parsimonia), engagement (encuentro), and where we can tone down the arrogance (soberbia) a bit, but you (the opposition) have to tone down the pettiness (mezquindad).”

It is necessary to highlight that historically, in the official narrative, the opposition is an extension of Washington’s interests. That rectification has also become evident in the claims of international sectors of the left that have shifted from the term “invasion” to “intervention” to sum it up as an “illegal” detention. Nicolasito has framed it that way on a podcast tour, where he downplays the importance of the new Miraflores–White House relationship and instead focuses on the conditions under which his father and stepmother are being held..

The removal of Alex Saab and Freddy Ñáñez from the cabinet can also be considered a gesture to the Trump administration—the former for being Maduro’s financial operator (imprisoned by the US and later released by the Biden administration), and the latter for being in charge of the Venezuelan government’s “communications guerrilla” during moments of greatest tension between Miraflores and the White House.

Between biting their tongues and appealing to selective memory, the regime now seems focused on appropriating the narrative and confronting disputes over the truth. Cabello tries to compensate for the impact of January 3 by claiming that nothing has really changed: “the only thing that didn’t work out for them is that the Bolivarian Revolution is still governing and the country is at peace.”

But still, “data beats narrative.” Starting with Delcy Rodríguez, in this provisional government that Trump says is obeying him, there are actors indicted and under investigation for crimes related to money laundering and drug trafficking. Not to mention the cases of human rights violations, which do not expire.

European lawmakers agreed on Wednesday to freeze the EU-US trade deal struck last summer, Euronews has learned, ratcheting up pressure on transatlantic relations after US President Donald Trump threatened fresh tariffs on several European countries who reject his insistence that the US should take over Greenland.

The agreement was reached last year after weeks of trade tensions triggered by the aggressive tariff policy Trump rolled out following his return to power. While a political agreement was reached in the summer, the deal still required formal implementation by the European Parliament.

Lead MEPs handling the file met on Wednesday afternoon and decided to suspend the process, officially postponing a vote that had been scheduled for next week in the Parliament’s Committee on International Trade.

Tensions intensified after Trump said on social media he would impose a 10% tariff from February on Denmark, Sweden, Norway, France, Germany, the Netherlands, Finland and the United Kingdom until “a deal is reached for the complete and total purchase of Greenland”. The rate would rise to 25% by June should no agreement be reached.

MEPs view the threat as a breach of the EU-US deal, which already imposes 15% US tariffs on EU goods while committing the bloc to cut its own tariffs on US industrial imports to 0%.

Lawmakers had been preparing amendments to the deal in the coming days, with many already describing it as unbalanced in the US’s favour.

On Saturday, Bernd Lange, the German MEP who chairs the Parliament’s trade committee, said work on the agreement should be suspended – a position adopted the same day by leaders of the Parliament’s main political groups, the EPP, S&D and Renew.

EU leaders will meet on Thursday night to prepare the bloc’s response to Trump’s threats, which many see as a form of blackmail.

This is a developing story.

Published on
21/01/2026 – 12:09 GMT+1

Gold soared to another record high on Wednesday, surpassing $4,800 per ounce, as leaders in Davos await the arrival of US President Donald Trump at the Swiss summit.

While the EU and US continue to clash over Trump’s plans to acquire Greenland, the precious metal has risen over 2% — with investors looking for a safe place to park their money amid renewed tariff threats. Silver prices, meanwhile, notched up 0.44% to $95.055.

“You’ll have to find out,” Trump said on Tuesday when asked how far he was willing to go to acquire Greenland. The US has failed to rule out military intervention, and is proposing extra tariffs on eight European countries if they fail to comply with his demands over the island.

After a record-breaking 2025, analysts remain optimistic about gold’s trajectory for 2026 as US interest rates fall, the dollar weakens, and central banks continue to add to their gold reserves.

When the greenback falls in value, this makes gold comparatively cheaper for foreign buyers and therefore drives up demand and prices.

Low US interest rates also increase gold’s appeal compared to interest-bearing assets, as investors aren’t significantly losing out if they choose the metal over assets like bonds.

Dollar dominance

Investors are betting that the next Federal Reserve chair, who will replace Jerome Powell when his term ends in May, will be more dovish than his predecessor — meaning they will be more focused on lowering interest rates than taming inflation risks.

The candidate will be nominated by President Trump, who has heavily criticised Powell for his cautious approach to policy easing over the last year.

Although central banks have been reducing their dependency on the dollar in favour of gold, experts stress that the greenback will not be usurped as the world’s reserve currency anytime soon, with the currency still making up roughly 57% of total central bank reserves. Even so, the greenback could see a gradual erosion of its status if US policy decisions continue to undermine its stability.

“We are taking the view that the dollar has some room to recover today,” said ING analysts in a note on Wednesday. They emphasised that a decline in the dollar a day earlier was linked to instability in the Japanese bond market, as well as fears that Europeans might start selling their US Treasury holdings.

“Japanese bonds have rebounded… and with Trump headed to Davos, we see some scope for de-escalation on the Greenland risk and fears of European dumping of US assets,” said ING analysts.

The Dollar Index, which tracks the greenback against six other currencies, traded less than 0.1% higher on Wednesday after falling on Tuesday.

Turning to stocks, Europe’s major indexes again found themselves in the red on Wednesday after two days of losses.

France’s CAC 40 had dropped 0.18% by around 11:30 CET, Germany’s DAX was down 0.68%, and Spain’s IBEX 35 lost 0.53%. Italy’s FTSE MIB was down 0.68%, the UK’s FTSE 100 slid less than 0.1%, while the broader STOXX Europe 500 tumbled 0.35%.

Ahead of the opening bell in the US, S&P 500 futures rose 0.34%, Dow Jones futures jumped 0.13%, and Nasdaq futures increased 0.19%.

For much of the last decade, chavismo has been described either as a regime surviving on inertia or as a system permanently on the verge of collapse. Both readings assume a level of rigidity that no longer fits the evidence. What Venezuela is living under today is neither chaos nor grand design, but something more flexible and more dangerous: an authoritarian system that has learned how to improvise.

This distinction matters. Regime learning does not mean the end of improvisation. On the contrary, it means knowing when to improvise, when to retreat, and when to pretend there was a plan all along. In Venezuela, the regime’s advantage has never been strategic sophistication, but adaptive resilience.

Every effective political actor operating under existential pressure must be able to solve problems on the fly. The Venezuelan regime has done this repeatedly. Faced with mass protests, electoral shocks, international sanctions, or diplomatic isolation, it has shown a consistent ability to regroup, recalibrate, and re-enter the field. This improvisational capacity is not accidental. It is enabled by structural advantages the opposition does not possess: control over territory, weapons, institutions, and the coercive apparatus of the state. Perhaps most importantly, what these assets buy: time. As with almost everything else in Venezuela, time is not democratic.

Of course, the regime would prefer a decisive victory. But over the last several years, neither decisive victory nor ideological closure has been necessary. For chavismo, tactical retreat does not imply strategic defeat. It only needs to survive the next shock. A misstep can be absorbed, reframed, or quietly undone. Improvisation works best when failure does not threaten survival. The same is rarely true for the opposition, where failure often carries near-fatal consequences.

Opposition movements, by contrast, have tended to think systematically. They rely on roadmaps, timelines, and narratives that make sense not only domestically but internationally. This has brought real benefits: legitimacy, recognition, and sustained external support. But it has also imposed constraints. Slogans harden into commitments, commitments into expectations, and expectations narrow the room for maneuver. La Salida, the National Assembly of 2015, “cese de la usurpación, gobierno de transición, elecciones libres,” and more recently hasta el final were not merely rhetorical devices. They were frameworks that structured behavior and raised the cost of deviation. Corners are useful defensively. They are far less forgiving when you paint yourself into one and need to move.

Opposition strategies shift from ambiguity to high-risk bets, swings taken not because the odds are favorable but because the stakes are existential (…) The opposition often plays under sudden-death conditions.

Recent opposition leadership has shown greater awareness of these traps. María Corina Machado, in particular, has so far navigated the terrain with more sophistication than her predecessors. Strategic ambiguity has functioned as a way to preserve optionality in an environment that punishes premature clarity. In this context, ambiguity is not indecision but insurance. Yet insurance premiums rise over time. Strategic ambiguity works best when no single actor controls the clock, which in Venezuela belongs entirely to the regime. External allies, domestic supporters, and internal rivals eventually demand definition. What begins as flexibility risks being recast as hesitation, or worse, as accumulated opportunity cost.

I have argued before that strategic ambiguity can create unexpected openings for the opposition. What matters now is how the regime has learned to anticipate and narrow those openings.

At certain moments, like the one Venezuela is now entering, optionality collapses. Delay becomes indistinguishable from defeat. Opposition strategies shift from ambiguity to high-risk bets, swings taken not because the odds are favorable but because the stakes are existential. These moments expose the core asymmetry: the regime can lose a round and remain in the game. The opposition often plays under sudden-death conditions. Improvisation under those circumstances looks less like adaptability than desperation, and Venezuelan voters tend to punish desperation. This means opposition actors learn under harsher constraints.

While opposition debates play out publicly, the regime has been adjusting more quietly. Under Delcy Rodríguez, the relationship with the United States has been reclassified. Washington no longer needs to function exclusively as an existential enemy in a revolutionary script. It can serve instead as a transactional counterpart, engaged or antagonized as conditions require.

This shift has been accompanied by a rapid change in political aesthetics. Senior regime figures have returned to X. Diosdado Cabello appears in a suit shaking the hands of European diplomats before justifying the steps the regime has been taking in its rapprochements towards the United States. Revolutionary excess has given way to bureaucratic normality. Performing confrontation has become less useful than performing administration.

Even symbols have life cycles. The regime will continue to invoke Maduro’s “captivity” and mourn those who fell defending him. But the narrative of Nicolás Maduro as a kidnapped or persecuted president awaiting redemption continues to fade, not because it was disproven, but because it outlived its usefulness. As Orwell understood, in authoritarian systems, leaders can always be repurposed.

The regime absorbs failure without discarding experience. The opposition, by contrast, renews itself through rupture.

Recent economic and social measures follow the same logic. Policy adjustments signal pragmatism and stability to external actors while leaving the internal balance of power untouched. Liberalization is selective. Repression is backgrounded, not removed. The loaded gun remains on the table, conveniently covered.

The moral asymmetry in Venezuela is absolute. An authoritarian regime that imprisons, tortures, and kills cannot be meaningfully compared to a democratic opposition struggling, often heroically, under conditions designed to break it.

Yet politics is not decided by moral standing alone. What has allowed chavismo to survive repeated crises is not ideological coherence but organizational learning. The regime absorbs failure without discarding experience. The opposition, by contrast, renews itself through rupture. Leaders are consumed by disappointment and replaced, taking with them whatever institutional memory they accumulated. Each cycle leaves the movement cleaner in principle, but poorer in adaptive capacity.

Regime learning in Venezuela is not about brilliance. It is about survivability. The regime can afford to improvise because time works in its favor, because failure is absorbable, and because retreat is not existential. The opposition operates under permanent endgame conditions. Every bet is final and every pause carries a cost.

This is why the regime’s turn toward normality matters. Not because it reflects genuine reform, but because it reshapes the criteria by which politics is judged. The longer chavismo is allowed to fail without consequence and return intact, the narrower the space for disruption becomes. In Venezuelan politics, the decisive advantage is not moral clarity or strategic daring, but the ability to lose, reset, and come back, while your adversary cannot.

Published on
20/01/2026 – 15:40 GMT+1

European wine industry leaders said on Tuesday that United States President Donald Trump’s threat to impose 200% tariffs on French wine if Paris does not join the “Board of Peace” for Gaza must be handled “with composure”, insisting the issue goes beyond the wine sector itself.

The wine and spirits sector has been at the centre of EU-US trade tensions since Trump’s return to power in 2025, with the US remaining the top export market for EU producers.

Negotiations over exemptions from the 15% US tariffs imposed under last summer’s EU-US trade deal had been dragging on, before the agreement itself was thrown into question this weekend by MEPs after Trump renewed his threats over Greenland.

“These are geopolitical issues that go beyond the sectoral stakes of wines and spirits,” the French Federation of Wine and Spirits Exporters (FEVS) said in a statement published on Tuesday. “As regards trade policy, this is an exclusive competence of the European Union. The issue must therefore be addressed at the European level, in a united and coordinated manner, and spoken with a single voice.”

Trump escalated tensions on Monday night, threatening a 200% tariff on French wine and champagne after an aide to French President Emmanuel Macron said France “does not intend” to accept an invitation to join the Gaza “Board of Peace” Trump is proposing.

“I’ll put a 200% tariff on his wines and champagnes and he’ll join, but he doesn’t have to join,” Trump told reporters.

Industry looks to Davos for a breakthrough

French wine producers are hoping talks in Davos this week between US, French and European leaders will help defuse the crisis.

“These statements by the President of the United States must be taken seriously, but with composure,” Gabriel Picard, President of the FEVS, said.

Industry representatives in Brussels echoed that stance.

“When we talk about wine, we are talking about terroir products, very well-known brands; it is an iconic product in France as well as in Europe,” Ignacio Sánchez Recarte, Secretary General of the European Committee of Wine Companies, told Euronews, explaining why the sector has been a frequent target in the EU-US trade dispute over the past year.

Trump had already singled out the EU wine and spirits industry in 2025, with the sector viewing itself as collateral damage of deteriorating transatlantic relations.

The EU-US trade deal struck last summer does not grant wines and spirits an exemption from the 15% US tariffs, despite efforts by the European Commission to secure special treatment.

The sector is considered strategic, with the US remaining the leading export destination for EU wine and spirits.

Sánchez Recarte noted that while wine exports to the US were particularly strong last year – accounting for 29% of EU exports – the surge was partly driven by US companies building up inventories ahead of new tariffs, and results later in the year were more concerning.

“After the EU-US trade deal, in July-August, we are seeing a significant decrease in the average value of exported wines,” he said.

Exports of the EU spirits sector alone fell by 25% between August and November 2025 compared with the same period in 2024, according to Eurostat.

Published on 20/01/2026 – 13:18 GMT+1
•Updated
13:22

European markets are weathering their second day of heavy losses this week, with sell-offs persisting as EU-US trade tensions simmer.

At around 12pm CET, France’s CAC 40 was down 1.28%, Germany’s DAX slid 1.52%, Italy’s FTSE MIB dropped 1.49%, while Spain’s IBEX 35 fell 1.66%. The UK’s FTSE 100 was down 1.11%, while the broader STOXX 600 dipped 1.23%.

Investors are watching nervously as world leaders gather in Davos for the World Economic Forum’s annual summit, and US President Donald Trump doubles down on his intention to conquer Greenland — threatening extra tariffs on eight European countries that stand in his way.

While the targeted nations are mulling their retaliatory options, Trump added extra fuel to the fire on Monday evening. Following reports that French President Emmanuel Macron had rejected an invitation to sit on Trump’s so-called “Board of Peace”, the US leader commented: “I’ll put a 200% tariff on his wines and champagnes and he’ll join.”

The Board of Peace was an idea initially proposed by President Trump as part of his plan to end the war in Gaza, although the initiative now seems to be aimed at mediating global conflict more broadly.

President of the European Commission Ursula von der Leyen has branded Trump’s tariff threats “a mistake”. “The European Union and the United States agreed to a trade deal last July. And in politics as in business — a deal is a deal,” she said during a Davos address on Tuesday.

In light of the recent threats on winemakers, major French beverage firms saw their stock suffer on Tuesday. LVMH, which owns Moët & Chandon, Dom Pérignon, and Veuve Clicquot, dropped 2.57% in Paris, while Rémy Cointreau fell 2.83%.

The losses came after a rocky day of trading for European firms on Monday, with the luxury goods and automobile sectors taking a significant hit.

On Tuesday, the STOXX Europe Luxury 10 was trading 1.88% lower, and the STOXX Europe 600 Automobiles & Parts Index fell 0.89% by just after midday.

Is ‘Sell America’ back?

Ahead of Tuesday market opening in the US, S&P 500 futures were down 1.53%, while Dow Jones futures slipped 1.38%. Nasdaq futures tumbled 1.91%.

Against the euro, the dollar fell 0.71% to 0.8523. The Dollar Index, which tracks the greenback against six other currencies, traded 0.9% lower at 98.340. Such movements have once again raised fears of a ‘Sell America’ trade, meaning a major investor retreat from US assets, repeating a narrative that emerged last year in the wake of Trump’s ‘Liberation Day’ tariffs.

US Treasury Secretary Scott Bessent nonetheless sought to ease jitters at Davos on Tuesday. “I am confident that the leaders will not escalate, and that this will work out in a manner that ends up in a very good place,” he said.

“This is the same kind of hysteria that we heard on April 2,” he said. “There was a panic. And what I’m urging everyone here to do is sit back, take a deep breath, and let things play out.”

Yields on US bonds jumped on Tuesday, with the 10-year Treasury yield trading around six basis points higher at 4.291%. 20- and 30-year Treasurys also increased — making it more expensive for the government to service its debts.

Meanwhile, heightened demand for safe-haven assets gave a boost to precious metals, with gold and silver rising 3.04% and 7.97% respectively.

Only a select number of European stocks managed to escape the wider downturn on Tuesday. One standout performer was British fintech Wise, which rose around 14% after a strong earnings report. The firm said it was looking to move its primary listing to the US in the first half of this year as it seeks partnerships with American banks.

Published on
20/01/2026 – 8:14 GMT+1

Eurogroup’s session in Brussels this Monday confirmed Croatia’s Boris Vujčić as the successor to Spain’s Luis de Guindos, whose eight-year mandate at the ECB expires in May.

While the nomination must still undergo consultative hearings at the European Parliament, and a review by the ECB’s Governing Council, this process is mostly protocol.

Vujčić is expected to take office on 1 June and become Christine Lagarde’s right-hand man.

The decision defied predictions and dismissed the European Parliament’s recommendations.

The Croatian beat five other candidates for the job, including the favourite to win, Finland’s Olli Rehn, and the Parliament’s favoured choices, Portugal’s Mário Centeno and Latvia’s Mārtiņš Kazāks.

Following the meeting, the president of the Eurogroup, Kyriakos Pierrakakis, said there was “an agreement on both the process and the person which is a sign of institutional maturity on the background of an exceptional number of candidates and past experiences”.

For Croatia, the promotion of its central bank governor to the ECB’s Executive Board is a swift ascent. The country only adopted the euro in 2023 and is the second-newest member after Bulgaria, which integrated the single currency at the start of this year.

Croatia’s infancy in the eurozone stands in stark contrast to the veteran status of the man who shepherded the nation through its transition.

Currently serving his third term, Vujčić has led the Croatian National Bank since 2012, playing a key role in negotiating the country’s accession to the EU in 2013 and overseeing the adoption of the euro a few years ago.

A “moderate hawk”

The ECB vice president makes a substantial contribution to the Governing Council’s financial stability analysis, influencing interest rate decisions, and also substitutes the President whenever necessary.

In the technical jargon of central banking, Vujčić is frequently classified as a “moderate hawk”.

Vujčić is a seasoned economist who has repeatedly cautioned against lingering inflation threats, pushing for a slow and measured reduction in interest rates to guarantee that price stability is firmly reinstated.

However, the Croatian’s colleagues have also previously described him as pragmatic, data-driven, and relatively predictable.

The Eurogroup likely sees Vujčić as someone who will not focus on political optics and instead help the ECB steadily navigate the tail end of its post-pandemic inflation fight.

The great reshuffle of the ECB

Despite Vujčić’s appointment being meaningful for Croatia, the vice presidency is not among the most desired roles in the ECB.

In fact, the EU’s major member states did not even propose candidates for this nomination, as they prepare for the many seats that become vacant next year.

The positions of president, chief economist, and head of market operations, will all be available in 2027.

The EU’s “big four”, Germany, Spain, France and Italy, are all expected to compete for those spots, aiming to preserve their controlling influence over the ECB.

European markets opened lower on Monday as threats from US President Donald Trump reignited a trade war with traditional allies across the Atlantic.

At around 10am CET, France’s CAC 40 had slipped 1.28%, Germany’s DAX was down 1.02%, and the UK’s FTSE 100 dropped 0.27%. Spain’s IBEX 35 fell 0.59% and Italy’s FTSE MIB slid 1.43%. Meanwhile, the wider STOXX 600 fell 0.87%.

European leaders will meet this week to decide how best to respond to threats from US President Donald Trump to acquire Greenland, a semi-autonomous Danish territory.

Washington announced on Saturday that eight European countries would face a 10% tariff on their US exports from 1 February unless they support the US’ proposal to purchase Greenland. This rate will rise to 25% in June if no deal is reached.

Specifically, the threat targets Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland.

Standing firm in their support for Greenland’s right to self-determination and Denmark’s sovereignty, EU member states are weighing their options. One possibility is the use of retaliatory tariffs on €93bn of US goods, a measure that was floated then abandoned last year during an earlier trade stand-off with Washington. Another proposal includes the activation of an anti-coercion tool, which enables the EU to impose punitive economic measures on a country seeking to force a policy change.

Shares in European carmakers saw a significant drop on Monday morning, with the STOXX Europe 600 Automobiles & Parts Index falling more than 2% and hitting a 52-week low. BMW shares were down 4.10% at just after 10am CET, while Volvo and Volkswagen were down 2.21% and 3.43% respectively.

Europe’s luxury goods sector also opened lower, with the STOXX Europe Luxury 10 dropping almost 3%.

On the other hand, safe haven assets such as gold and silver hit new highs as investors moved away from riskier assets such as crypto. Bullion neared $4,700 an ounce on Monday, climbing over 1.66%, and silver prices crossed the $94 threshold.

Defence stocks also rallied in Europe, with the STOXX Europe aerospace and defence index up 0.49%. Thales rose 2.41%, Rheinmetall was up 2.89%, Leonardo shares jumped 3.05%, and BAE systems rose 1.77%.

Markets in Asia also saw a downturn. Japan’s Nikkei 225 fell 0.65%, Hong Kong’s Hang Seng dropped 1.05%, and Australia’s S&P/ASX 200 slipped 0.33%. Korea’s Kospi and China’s SSE Composite Index both bucked the trend, closing higher.

US markets are closed today for the Martin Luther King public holiday, but S&P futures slid around 1.18%.

As of around 10am CET, the dollar had fallen 0.21% against the euro.

With last summer’s trade deal between the US and the EU hanging in the balance, investors will be focused on further announcements from the two trading powers.

“The flare-up over Greenland and the threat of renewed tariffs are very unwelcome for European industry. This comes at a time when industrial sentiment has finally started to rise, with businesses seemingly having learnt to live with last year’s tariff volatility,” said analysts from ING.

“These developments will focus European minds on the need to generate domestic demand and potentially even push through sluggish reforms such as the Savings and Investment Union, to allow Europe’s capital markets to better compete with those of the US,” they added.

Markets will also be tracking announcements coming from the World Economic Forum in Davos, Switzerland, which starts this week. Trump will address the Forum on Wednesday.

Pressure is growing on European leaders to deploy its trade bazooka against the United States after President Donald Trump threatened fresh tariffs if Denmark does not agree to sell the territory of Greenland. In a scenario of coercion, the EU counts with a powerful tool in the anti-coertion instrument, and calls are intensifying for Brussels to trigger it.

But how does it work? Euronews explains:

What is the anti-coercion tool?

Adopted in 2023, the tool was designed with the US and China in mind as the world’s two biggest economies become more assertive in pushing their national interests through tariffs and the weaponisation of natural resources.

Under the existing legislation, economic coercion exists when a third country “applies or threatens to apply measures affecting trade or investment in order to prevent or obtain the cessation, modification or adoption of a particular act by the European Union or a member state.”

President Trump is threatening tariffs from February 1 ranging from 10% to 25% if Denmark does not agree to sell Greenland by June. On paper, it looks like coercion.

Why is the anti-coercion tool seen as bazooka?

Last year, the EU mulled different options of possible retaliation as the US threatened to hammer the bloc with tariffs on Liberation Day.

Brussels drew up a list of American items that would be hit, affecting states mostly ran by Republican governors, in a tit-for-that move. At the peak of transatlantic tensions, the EU said it would target €93 billion worth of goods including bourbon, airplane components which would have dented Boeing, soybeans and poultry among other items.

Ultimately, the EU decided not to retaliate and took a deal which tripled tariffs on the bloc to 15% while cutting duties to zero on American industrial goods. While the deal was seen as imbalanced and unfairly tilted in favour of Washington, the Commission said it had provided clarity and stability for businesses in a difficult geopolitical scenario.

At the time, the idea of using the trade bazooka was only floated, but never seriously considered. That is because the anti-coercion tool was seen as the nuclear option.

The ACI allows the EU to shut off access to the European single market representing 500 million consumers. It limits trade licenses and access to public procurement tenders. For American services, it means the European market would be off the table.

How is coercion established and how long does it take?

The tool is not automatic, and it takes time to implement. For many, the power behind it comes in the form of deterrence. Once the trade bazooka is out, it is clear that the EU means business and is willing to enter a fight with the single market as leverage.

Once the question of coercion is raised, the European Commission has four months to assess the case and the actions of the third country in question, after which EU member states must decide by qualified majority whether to activate the instrument or not.

If that happens, a negotiation phase with the country in question begins.

If talks fail, the EU can deploy a broad range of countermeasures beyond tariffs.

The tool covers services, investments and access to public procurement. It also allows for steps such as excluding foreign companies from EU tenders or partially suspending the protection of intellectual property rights.

The implications are such, that any response under the ACI must be “proportionate and not exceed the level of injury to the European Union”.

What are the implications for the EU?

There are many second-round effects. The first one stems from the fact that the ACI has never been used. Member states have often talked about it, but don’t really know what kind of implications it could bring about on political and geoeconomic terms.

This is why countries from Germany to Italy have repeatedly cautioned against deploying it too quickly or without a good legal case behind it. Berlin and Rome were two of the member states most in favour of cutting a deal with the US last year.

Last year, even as the US threatened to punitive tariffs on the bloc, the EU also feared that deploying such strong measures against the US could backfire and damage the transatlantic relation. The EU still hopes to keep Washington engaged in the continent’s security through NATO and discussions around Ukraine’s peace settlement.

Beyond the US, the EU also considered triggering the ACI after China began weaponising the export licensing of rare earth and critical minerals – vital for Europe’s tech and defence industries – at the end of last year. Ultimately, the EU opted for dialogue.

So, what happens next?

The EU could decide this time around President Trump has crossed the line and gather a qualified majority to trigger the anti-coercion instrument. European leaders have said they will not be “blackmailed” and expressed full solidarity for Denmark and Greenland.

If they go ahead, that will likely mean a new trade war and fresh escalation, but it may be the price to pay for the European Union to defend the sovereignty of a member state.

Unlike the EU-US deal signed last year where a compromise was deemed possible, Copenhagen has repeatedly said there is no room for negotiation when it comes to transferring the sovereignty of Greenland and has rejected any possibility of a sale.

The EU could go back to the retaliatory tariffs it drew up last year and – this time around – implement them hoping the impact on US companies and consumers ahead of the midterm elections where Republicans risk losing control of the House of Representatives and the Senate prompts Trump to change course.

One thing is clear, if the tariffs on Denmark and its allies go into effect on February 1, the European Union and the United States will enter a new trade war.

Signed on Saturday with Argentina, Brazil, Paraguay and Uruguay, the EU-Mercosur deal is designed to bolster the EU’s geostrategic position. Yet it has already exposed deep political fault lines inside the bloc, with France emerging as the most vocal opponent.

“We choose fair trade over tariffs, we chose a productive long-term partnership over isolation,” European Commission President Ursula von der Leyen said at the ceremony in Asuncion, Paraguay.

She called the agreement, “25 years in the making”, an “achievement of a generation”, for “the benefit of generations to come”, in her message on X.

That, however, goes against the wishes of Paris, which voted against the agreement in a key Council vote on 9 January, even as a majority of member states backed the deal, a split that risks fuelling a narrative that the Mercosur agreement is being imposed on France by Brussels.

Supporters argue the agreement, which would create a transatlantic free-trade zone, is critical to counter China’s growing influence in Latin America.

Commission figures show the EU’s share of Mercosur imports was about six times larger than China’s in 2000. Today, China’s share is roughly 40% higher than the EU’s.

In Brussels, the deal is also seen as essential to diversifying EU trade ties as the US tightens market access and Beijing continues to weaponise European dependencies on Chinese materials and technology.

“Given the geopolitical and geo-economic context – where, for instance, Donald Trump is imposing insane tariffs on us – what we want is not the law of the strongest, but to negotiate, as the European Union has always done, with our partners,” Spanish MEP Javier Moreno Sánchez (S&D) told Euronews.

The debate in Paris grows increasingly heated

After 25 years of negotiations led by the Commission, the agreement has been approved by a majority of member states and formally signed. On Monday, it will be taken to the European Parliament for the final steps of its ratification.

Lawmakers are already divided along national lines, mirroring the 9 January Council vote. France, Poland, Hungary, Ireland and Austria opposed the deal, while Belgium abstained. Supporters hope last week’s approval will build momentum in Parliament, though attention is focused on a resolution to be voted next week seeking to challenge the deal before the EU’s top court – a move that could still draw backing from hesitant supporters.

In France, the Mercosur saga has turned into a political flashpoint that could deepen euroscepticism in a country whose largest delegation in the Parliament already comes from the far-right Rassemblement National (RN), which is ahead in the polls of the next presidential election.

After Paris failed to assemble a blocking minority against the agreement, RN leader Jordan Bardella initiated a no-confidence vote in the European Parliament that is scheduled for next week. He also filed a no-confidence motion in France’s National Assembly this week, which was rejected.

The debate in Paris is increasingly heated, with political forces across the spectrum opposing the deal. Critics argue it would expose EU farmers to unfair competition from Latin American imports that do not meet the bloc’s production standards.

Supporters counter that France’s agricultural woes are home-grown and that the EU-Mercosur agreement has become a convenient scapegoat.

“The blame is a purely a French one, because the problems are French,” Jean-Luc Demarty, former director-general for trade at the European Commission, told Euronews. “After 15 years of absolutely lamentable national agricultural policy – and economic policy as well – the competitiveness of French agriculture has deteriorated considerably. The Mercosur (deal) is a scapegoat.”

Opponents have nonetheless secured key environmental provisions, tariff-rate quotas on sensitive products such as beef and poultry, and safeguard clauses to prevent market disruption. The Commission has also pledged €45 billion in support for EU farmers from 2028 – commitments that helped sway Italy’s crucial position into backing the deal. But not France.

Paris points now the limited economic gains of the deal. On 8 January, French President Emmanuel Macron cited Commission estimates in a post on Xshowing the agreement would lift EU GDP by just 0.05% by 2040.

Tariffs on EU cars – currently at 35% and a key driver of German support – would be phased out only over 18 years, by which time Chinese automakers may have already secured significant market share in Mercosur countries.

EU companies wait for the deal’s implementation

MEPs backing the deal say other sectors stand to gain in areas including services, dairy, wine and spirits, while EU firms would gain access to public procurement markets.

“We have a large majority of industrial players and service providers who are waiting for this agreement and are keeping a low profile,” Moreno Sánchez said.

Those arguments have struggled to gain traction in France, where resistance to free-trade deals runs deep. The EU-Canada trade agreement (CETA), provisionally in force since 2017, has yet to be ratified by the French parliament, and the Senate voted against it in 2024.

German MEP Svenja Hahn (Renew) noted that fears may be overstated. “Only 2% of the quotas that are in the CETA for beef have been used,” she told Euronews.

In countries opposed to the Mercosur deal, supporters have found it hard to be heard after years of vocal criticism.

“In a number of countries, there was a narrative portraying this agreement as something that had to be fought against in order to secure certain concessions,” Eric Maurice, an expert at the Brussels-based European Policy Center, told Euronews. “It was therefore initially presented in a negative light, before its benefits were later defended.”

More than two decades after talks began, the Mercosur deal risks fuelling especially untimely resentment towards the EU.

European leaders pledged a united response after US President Donald Trump threatened fresh tariffs until Denmark agrees to sell Greenland in an unprecedented escalation that could trigger a new trade war and break the transatlantic alliance.

From Ursula von der Leyen to French President Emmanuel Macron and German Chancellor Friedrich Merz, EU leaders vowed to stay “united, coordinated and committed” to upholding Europe’s sovereignty after the Trump administration said additional tariffs of 10% would apply on eight European countries starting February 1.

In a social media post on Saturday, Trump said all products from Denmark, Sweden, Norway, France, Germany, the Netherlands, Finland and the United Kingdom would be subject to an additional 10% tariff, which could be increased to 25% by June, to be paid until “a deal is reached for the complete and total purchase of Greenland.”

Greenland is a semi-autononomous territory belonging to Denmark. Earlier this week, the same group of countries said they would deploy a joint mission to the island, which has prompted the ire and retaliation of the White House in the form of new tariffs.

Last summer, the EU and the US signed a deal which tripled duties on European products to 15% while lowering tariffs to zero on US industrial goods. At the time, Brussels indicated the deal, which saw major EU concessions in favour of Washington, was the price to pay for US engagement in Ukraine and global stability.

While it was not immediately clear how the tariffs announced Saturday would be stacked up, the threat of additional duties risks triggering a new trade war between the two.

EU Council president António Costa said he would coordinate leaders in their response.

Ursula von der Leyen joined echoed his remarks saying “tariffs would undermine transatlantic relations and risk a dangerous downward spiral. Europe will remain united, coordinated and committed to upholding its sovereignty.”

While the Commission negotiates matters related to trade on behalf of the 27 and has exclusive competences over commerce, the White House could go after individual countries by targeting specific products and industries related to those countries.

European leaders condemn ‘unacceptable’ threats

The Trump administration has upped the bellicose rhetoric around Greenland in recent weeks saying the territory will have to be transferred to the US for national security matters “the easy way or the hard way” and rejected suggestions that Denmark, assisted by its European allies, is capable of taking care of the territory and Arctic security.

Earlier this week, Danish officials held talks with American officials, pushing back against “a narrative” that Russian and Chinese warships are allowed to circle freely in Greenland. Danish intelligence says no Chinese ship has been spotted in a decade.

In a show of support for Denmark, a group of European countries joined an exploration mission to Greenland. They all now face tariffs from the Trump administration as a result.

Danish foreign minister Lars Løkke Rasmussen said he was “surprised” by the White House reaction and suggested that the purpose of the European mission is to “enhance security in the Arctic” as suggested by the White House.

Meanwhile, French President Emmanuel said the EU would not be intiminated.

“No intimidation or threat will influence us – whether in Ukraine, in Greenland or elsewhere in the world,” Macron wrote in a social media post on X.

“Tariff threats are unacceptable and have no place in this context. Europeans will respond in a united and coordinated manner if they are confirmed.”

Swedish Prime Minister Ulf Kristersson echoed his remarks, saying “we will not allow ourselves to be blackmailed” in one of the most severe statements to date.

Parliament calls for EU to bring out the big trade bazooka

The latest spat calls into question the European strategy of appeasement when it comes to Trump and has revitalised calls to deploy its trade “bazooka” known as the anti-coercion instrument, which would allow the EU to severely retaliate against the US.

The tool adopted in 2023 to combat political blackmail through trade allows the EU to restrict third countries from participating in public procurement tenders, limit trade licenses and shut off access to the European single market.

Bernd Lange, a German parliamentarian and chair of the European Parliament’s trade committee, said business cannot go on as usual as “President Trump is using trade as an instrument of political coercion” on European allies.

He called to suspend the implementation of the reduction of tariffs on US goods and said the EU must now activate the anti-coercion instrument. “A new line has been crossed.”

Meanwhile, Manfred Webber, the powerful chief of the conservative European People’s Party, urged the EU Parliament to freeze the EU-US deal.

“Given Donald Trump’s threats regarding Greenland, approval is not possible at this stage. The zero tariffs on US products must now be put on holds,” he said Saturday.