Venezuela owes China’s banks about $10 billion, and its oil is about the only legal way it has to pay them back.
President Trump’s threatened tariffs on countries that buy oil from Venezuela are another example of how his trade moves could hit China the hardest even when China is not named as the target.
Mr. Trump announced the 25 percent “secondary tariffs” last week, portraying them as aimed at the authoritarian government of Nicolás Maduro in Venezuela and at the country’s Tren de Aragua gang. The Venezuelan-related tariffs could still be imposed on top of the very steep tariffs that Mr. Trump declared on Wednesday, which bring his new tariffs on Chinese goods to 54 percent.
The biggest buyer of Venezuela’s oil is China — and China is the country least able to stop buying oil from Venezuela.
Venezuela owes about $10 billion to China’s state-run banks, according to AidData, a research institute at William and Mary, a university in Williamsburg, Va., that compiles information about Chinese development financing.
China’s banks need their loans to Venezuela to be repaid. They already face heavy losses on real estate lending at home. On Monday, China’s Ministry of Finance said it would sell about $70 billion worth of bonds to shore up the country’s four largest commercial banks.
But after more than a decade of economic mismanagement, Venezuela has almost no legal exports except oil to raise the money it needs to keep paying its debts to China.