What the new US 'imperialism' means for resource-rich South America

  Over the years, Venezuela has witnessed a decline in every area despite having one of the world’s largest oil reserves. The country was undergoing hardship because of internal economic and political chaos created by political leaders over a period of time. The resource wealth was not properly utilised in strengthening Venezuela. It remained a victim of US sanctions and more recently, a naval quarantine halted most of its oil exports, which resulted in a significant downturn in its economic growth.  Moreover, it experienced a collapse in productive capacity from its high point around 3.4 million barrels per day in the 1970s to less than 1 million barrels per day in the 2020s. Venezuela, a petrostate, could not sustain itself because of the government’s complete economic mismanagement. A lack of investment and maintenance crippled the state-owned oil company, 

Petróleos de Venezuela. As revenues fell, the governments under both Hugo Chavez and Maduro failed to cut spending. The oil price collapse hit hard, leading to the largest recession in the history of the Western hemisphere, which further exacerbated the steep weakening of Venezuela.

  Petrostates are always vulnerable to what economists call the “Dutch disease”, in which a government develops an unhealthy dependence on natural resource exports to the detriment of other sectors. The relief from US sanctions on oil and gas sectors in 2023 in exchange for democratic reforms had sparked hope for reviving the oil industry. But the internal situation worsened, with extreme hyperinflation, government repression, and deepened political division.

  Trump was looking for an opportunity to step in and get complete control over Venezuela, and send a signal to other resource-rich South American countries. He technically made a case by labelling Maduro as a leader promoting narcoterrorism and drug trafficking. Another rationale which reflected Trump’s intent to rebuild Venezuela’s oil sector was his categorical statement that the US planned to run the country for an unspecified period. It seems the US has already started engaging the world’s leading commodity marketers and key banks to execute and provide financial support for sales of crude oil and related products.

  Maduro’s capture came after months of deadly strikes on drug-carrying boats and the seizure of two tankers carrying Venezuelan oil. Even as the US military build-up took place off the country’s shores, US intelligence agencies were gathering minute-to-minute information on Maduro’s activities. Having planned the military operation with a lot of caution, Operation Absolute Resolve took two hours and 20 minutes and involved over 150 aircraft that worked to dismantle Venezuelan air defences, clearing the path for military helicopters carrying troops to Caracas. Every step of the operation was being watched by Trump himself.

  Although the US action on Venezuela was not new in its foreign policy orientation, the style and the message which Trump wanted to give was different. The US pioneered “gunboat diplomacy”, using its military to grab territory and resources for its own benefit. US President William McKinley (1897-1901) successfully led the US in the Spanish-American War and oversaw a period of American expansionism, with the annexations of Hawaii, Puerto Rico, Guam, the Philippines, and American Samoa.

  Trump had no apprehensions in stating that the US was well within the rights to wrest resources from Venezuela that he believed had been wrongly taken from the hands of US corporations. Although the US has not sought to assert control over a vast Latin American country in recent decades, its quest for achieving supremacy in the region has begun. Maduro remained an unpopular leader in Venezuela and was accused of rigging the election in 2024. This perhaps became an important reason for the US to initiate military action and punish Maduro severely, but it certainly was not an initiative for regime change.

  At an emergency meeting of the United Nations Security Council (UNSC), Colombia (a non-permanent member of the UNSC) brought in a resolution condemning the US’ military operations in Venezuela.  But the US had no penitence whatsoever. The dominant view that emerged from the UNSC debate centred around how the violation of international law through military incursion into a sovereign state challenged the moral and ethical principles of the international liberal order, whose very foundation had been fractured from within. Even the UN Secretary-General, Antonio Guterres, also acknowledged that the Trump administration had violated the UN Charter.

  Colombia, another probable target of Trump, claimed that the US was undermining international peace and security. Russia and China became the harshest critics of the US action in Venezuela at the UNSC debate and demanded the release of Maduro and his wife. They also called for a halt to any further military action by the US.

  The UNSC also debated Trump’s comments signalling the possibility of expanding military action to other South American countries, including Mexico and Colombia, over drug-trafficking accusations. Following the operation in Venezuela, Trump also reiterated his interest in taking over the Danish territory of Greenland, citing US security concerns. It prompted an angry reaction from both Denmark and Greenland.  

There is no denying that Trump has left South American countries — particularly Colombia, Brazil, Argentina, and Bolivia — on the edge. The domino effect is likely to engulf some of these countries, which certainly would require them to work for an effective regional security integration. The case made for Colombian President Gustavo Petro has not been ruled out completely. Trump called Petro a “sick man” involved in drug trafficking; so, military action against Colombia could be a probable solution. To a larger extent, Petro has made the country unstable, and citizens are exhausted by decades of armed conflict.  There seems to be a thaw now because of a diplomatic effort by US Senator Rand Paul (of the Republican Party), and Daniel García-Peña Jaramillo, Colombia’s ambassador to the US. After Trump had a telephonic conversation with Petro, there was a de-escalation in bilateral tensions.

  The debates pertaining to the South American countries probably featuring on Trump’s plan of action have been gaining momentum, and mostly have geopolitical dimensions. The US is witnessing a new phase in its extractivist rivalry with China. South America has a vast mineral wealth, which will dictate the power trajectory of major powers in the 21st century. This wealth has been directed towards energy transition or a build-up of military power to defend the larger national interests of the two unrivalled powers.

  The National Security Strategy, released by the Trump administration in December 2025, focused on threats from the Americas in form of migration, crime (including narcotics), and supply chain disruption. The document also highlighted the need to eject foreign rivals from other South American countries. China overtook the US as South America’s main trading partner, and currently buys more oil from Venezuela, more iron from Brazil, more ferroalloys from Colombia, and more copper from Chile, Peru, and Bolivia.

  The US’ other notable source of concern is the ascendance of China’s global control on critical minerals. China is using this as a bargaining chip and threatened to withhold exports of these commodities, which are required for weapons systems, renewable energy technology, and artificial intelligence (AI). South American countries together can address this major concern. 

  According to the US Geological Survey, Brazil has the world’s second largest deposits of critical minerals and is also the leading producer of niobium (needed for high-grade steel). For the US, China’s increasing presence in the country, besides the latter’s left-leaning government, remains part of the challenge. Another South American country, Bolivia, has some of the world’s biggest reserves of lithium, which is essential in electric car batteries. China’s engagement with Bolivia has increased at a phenomenal pace.

  Trump does not like the growing Chinese presence in a region it considers its backyard. China has invested significantly in processing facilities and transport infrastructure in South America, and its increasing dominance across the continent led the US to think differently. To create its sphere of influence, the US has started using military force and also intervened in the internal affairs of other countries. Some leaders, such as Argentina’s Javier Milei, are supportive of Trump’s actions. That is because Argentina relies heavily on the US’ financial support to stabilise its currency. Ecuador’s President Daniel Noboa has also been attempting to accommodate US interests by constructing a US military base on the Galápagos Islands, which is a Unesco World Heritage Site and Biosphere Reserve.

  The governments of Mexico, Brazil, Colombia, Uruguay, and Cuba have perceived the US’ actions in Venezuela as a challenge to regional stability. Their leaders are increasingly apprehensive that the US will try to interfere in their domestic politics. There will be a consolidation of South American countries to strengthen regional stability. The responsibility of the Union of South American Nations, which was created in 2008 mainly from an initiative taken by Venezuela and Brazil, will increase. 

In January, Trump shared an AI-generated map of the US, showing Canada, Greenland, and Venezuela as a part of its territory. This would be disturbing for both South American and European countries. How the geopolitical situation unfolds in the days to come will form a major part of the debate.

  With Operation Absolute Resolve, the fast changing dynamics of the US’ foreign policy are making its own allies feel threatened. The US Secretary of Defense (now War), Pete Hegseth, and the Chairman of the Joint Chiefs of Staff, General Dan Caine, will have tougher times ahead in executing Trump’s abrupt decisions. Slowly and steadily, non-adherence to international legal principles will become the new norm for the US.

  India has been watching these developments with caution, and it will certainly play a bigger role in bridging the vacuum created by the US in the foreseeable future. The rest of the world has a lot of expectations from India in establishing a rules-based international order.