The fallout from the US capture of Venezuelan president Nicolás Maduro continues to escalate, as the US yesterday seized a Russian-flagged oil tanker linked to the Latin American country, with the support of British armed forces.

Today’s ‘Day in Trade’ also covers the ramifications of Donald Trump’s increasingly forceful approach to US foreign policy for European relations around Ukraine and Greenland.

His announcement yesterday that the US will withdraw from several international and UN bodies – including the UN Conference on Trade and Development (UNCTAD) – could also have major repercussions for the rules-based multilateral trade system.

Trump to withdraw US from UNCTAD

To begin, in a further blow to multilateralism, Trump yesterday announced that his administration will withdraw the US from several international and UN bodies, including the UN Framework Convention on Climate Change, cultural body UNESCO and UNCTAD.

The White House accused these bodies of promoting "radical climate policies, global governance, and ideological programs that conflict with US sovereignty and economic strength," Reuters reports.

The move will be seen by many commentators as a further indication of the US move away from multilateralism and the rules-based order for trade. The announcement comes just days after the US unilaterally took military action in Venezuela to capture the Latin American country’s president, Nicolás Maduro.

US seizes Russian-flagged tanker

Following its capture of Maduro, the US has confirmed that it has seized the Marinera, a Venezuelan-linked, Russian-flagged oil tanker.

The US Coast Guard had a warrant to seize the ship, the BBC reports, alleging that it was part of a ‘shadow fleet’ taking US-sanctioned oil from Venezuela to Russia or Iran. Analysis from Lloyd’s List has confirmed that the use of the Russian flag on tankers has grown 40% since the invasion of Ukraine and the introduction of sanctions on the country’s oil industry.

President Trump has also urged the US oil industry to make significant investments in Venezuela as he bids to control Venezuela’s oil “indefinitely”. US oil companies are set to meet Trump on Friday and are expected to demand “serious guarantees” from Washington before committing to any investments.

“No one wants to go in there when a random fucking tweet can change the entire foreign policy of the country,” a private equity investor, with expertise in the energy sector, told the FT.

While the UK government has refrained from condemning the US capture of Maduro, which many commentators say breached international law, it has confirmed that it supported the US seizure of the Marinera. Defence secretary John Healey said yesterday that the support of UK surveillance aircraft and the RFA Tideforce ship was “in full compliance with international law”.

The US military’s European Command thanked the UK Ministry of Defence for its “unwavering support” during the operation.

What does this mean for Greenland and Ukraine?

Sir Keir Starmer spoke with Trump yesterday in his first call with the US president since the Maduro capture.

The interception of the Marinera was discussed, alongside the future of Greenland, which Starmer said must be decided by the island’s inhabitants and Denmark, the FT reports.

White House spokeswoman Karoline Leavitt told reporters yesterday that the US government is “actively” discussing a potential offer to buy the island, which has a strategic location in the Arctic and is rich in natural resources including rare earth minerals, uranium and iron.  

European leaders issued a joint statement on Tuesday to support Denmark and Greenland, reiterating that both are members of Nato and calling for the US to uphold “principles of the UN Charter, including sovereignty, territorial integrity and the inviolability of borders”.

The future of Ukraine is also a continued area of tension in US-European relations. The ‘coalition of the willing’ met in Paris this week to discuss the ongoing ceasefire negotiations with the US, Russia and Ukraine, with the UK and France signing a “declaration of intent” to station forces in Ukraine as part of any deal, Politico reports.  Starmer told the House of Commons yesterday that MPs will have an opportunity to vote on the deployment of troops in Ukraine.

While it is yet to be seen how the Maduro capture and Marinera seizure affect US-Russia negotiations over Ukraine, Trump is reportedly continuing to exert pressure on the Kremlin via sanctions. Politico reports that Senator Lindsey Graham secured Trump’s approval to impose new sanctions on Russia at a meeting yesterday.

More broadly, the use of military force to carry out Trump’s foreign policy objectives looks set to become a new norm, with the president yesterday asking US lawmakers to increase defence spending by 50% to US$1.5tr by 2027.

“I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,” Trump wrote on social media.

In other news

• India’s commerce and industry minister, Piyush Goyal, is visiting Brussels in a bid to complete negotiations for an EU-India trade deal, The Hindu reports
• The EU Commission is set to give member state governments access to financial support for farmers, in a bid to secure support for its trade deal with the Latin American trade bloc Mercosur, according to EU Observer
• Smaller farmers in England will be prioritized for the UK government’s Sustainable Farming Incentive, the Guardian reports

Yesterday in trade

• Italy moved towards a position of backing the EU-Mercosur trade deal
• Brazil reported a forecast-beating trade surplus for 2025
• The UK government presented a bill to Parliament establishing a legal framework for its ongoing ‘reset’ with the EU

You can read yesterday’s trade news here.