In a week where US president Donald Trump’s increasing military interventionism captured headlines as well as heads of state, we considered the commodities underpinning his actions in Venezuela and escalating rhetoric over Greenland.
Beyond the US, the EU approved the Mercosur trade deal and continued talks with India, while the UK’s timeline for drawing up legislation to underpin the Labour government’s reset of relations with Brussels became clearer.
The big picture: After forcibly seizing Venezuelan president Nicolás Maduro last week, US president Donald Trump’s attention turned fully to the country’s oil.
After announcing a deal to access US$2bn if the country’s crude oil on Tuesday (6 January), his administration claims it will control Venezuela’s oil production “indefinitely”, according to US energy secretary Chris Wright, beginning by selling its reserves – the world’s largest supply – on global the market.
To spur new production, Trump has spent the week ‘in talks’ with US oil executives from the likes of ConocoPhillips and Exxon Mobil, who will visit the White House today (9 January), and representatives from its biggest energy groups, to negotiate the conditions under which the nation’s largest firms would considering re-investing in the country.
The FT reports that many are raising concerns with the legality and longevity of potential contracts, with some investors questioning how long it would take before they would see returns, particularly in relation to the end of Trump’s current term. Against a backdrop of low oil prices, it’s a challenging proposition to sell.
Less challenging has been securing the support of the interim Venezuelan leadership. Former vice president Delcy Rodríguez was sworn in as acting president, even as some within the US intelligence community suspect her of aiding US forces with Maduro’s extraction.
Trump claimed the country’s production facilities could be “up and running” in 18 months, with exports of 30 – 50mn barrels of sanctioned oil to the US.
Exports of Venezuelan crude declined in the wake of former president Hugo Chávez’ nationalisation of the country’s oil assets and infrastructure, and US sanctions on the country that were first introduced in 2005.
Good week/bad week: After 25 years of negotiations the EU sealed the deal with Mercosur, its South American equivalent. A free trade agreement between the two blocs backed by a majority of member states at an ambassadors meeting in Brussels, after Italy appeared to swing in favour of the deal.
Italy, along with France, previously rejected the deal in response to vehement waves of opposition from farmers, who were concerned they would face unfair competition from producers held to less stringent food standards.
Ireland, Hungary, Poland, Austria and France continued to oppose the deal.
Promises from French political leaders that sub-par products will be banned from entering the EU didn’t placate farmers, who have disrupted Paris with renewed protests this week.
Less good news for the EU was that the US’ military threats of intervention came closer to home, in the form of Trump’s designs on Greenland.
After the military action in Venezuela, Greenland and Denmark – which controls the semi-autonomous territory’s defence and foreign affairs – have expressed concerns about US threats to its sovereignty.
Earlier this week, the administration’s official line was that it was actively discussing an offer to buy Greenland. However White House press secretary Karoline Leavitt also refused to rule out military intervention, telling reporters that “utilising the US military” to acquire the territory is “always an option”.
Greenlanders continue to assert their wish to remain independent of US control, and eventual ambitions for full self-determination.
The US stance is that the territory is “critical” for US security in the Arctic, a point reiterated by VP JD Vance yesterday, when he told Fox News that Denmark and the wider European community hadn’t done “a proper job” of securing the territory, describing the US as “partially dependent” on Greenland for its “entire missile defence infrastructure”.
As Arctic ice melts, other powers, such as Russia and China, also gain greater access to the region, which is rich in critical minerals, ranging from rare earths, copper, graphite and nickel, to tungsten, zinc and iron ore.
How’s stat? Over US$5bn. That’s the potential value of the India-EU trade deal close to being completed this week.
India’s commerce minister Piyush Goyal visited Brussels yesterday for talks – first begun in 2007 – which are in their final phase.
The EU continue to seek to diversify trading partners as tension with China increase and the US economic self-interest persists.
Quote of the week: “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.”
Following the recent wave of US military interventions, Trump gave an indication of where he’d like the nation’s increased tariff revenue to be directed.
As critics have noted, while tariffs were always a Trump campaign cornerstone, the president first ran for office on a platform that promised to limit the US’ military presence abroad.
The week in customs: The UK’s government is working towards legislating its planned ‘reset’ of relations with Europe.
Politico reported that a bill to create a legal framework on alignment, in areas ranging from food standards, pesticide use, the EU’s electricity market and emissions trading, could be introduced to parliament as early as spring.
These measures reflect proposals for cooperation set out at last year’s EU-UK Leader’s summit.
One area of the UK economy where there won’t be any future dynamic alignment is financial services. After lobbying from the sector to remain decouple from the EU, government officials confirmed to the FT there would be no attempt to reintegrate it with Brussels.
What else we covered: Our regular member-exclusive feature Commodity in Focus returned with a look at aluminum. Often overshadowed in investment and policy support by steel, manufacturers and lobbyists discussed their hopes for the sector in 2026.
One regulation on their agenda was the EU’s Carbon Border Adjustment Mechanism (CBAM), which entered its ‘definitive phase’ this week. The Chartered Institute’s Joseph Goldsworthy explains this new phase of the regulation and advises those exporting affected products to the bloc to evaluate how they’ll support customers to remain CBAM-compliant – a must if they’re to remain competitive and avoid paying larger fees at the border.
Elsewhere, we heard from trade professionals working in Africa and with African firms about the progress of the African Continental Free Trade Agreement, which aims to liberalise tariffs and harmonise regulations between nations to create a single market capable of spurring intra-continental trade.
True facts: Yesterday (8 January) marked a decade since the death of music icon David Bowie.
Selling over 140m albums globally, and touring the Americas, Europe, Asia and Australasia, his genre-defying music and shape-shifting artistic personas captivated the world.
