The odd convergence of a focus on sanctions risk as opposed to the fraying economic foundation of dollar hegemony serves the interests of both sides of the geopolitical divide
There is a strange paradox at the heart of the whole de-dollarization trend. Both the BRICS upstarts seeking alternatives to the dollar and the aging hegemon trying to forestall this process have, at least officially, coalesced around a similar but not entirely accurate narrative: that the gradual pivot away from the dollar is primarily driven by Washington’s weaponization of its currency.
The sanctions on Russia in 2022 certainly did mark the definitive moment when Washington gave up on any notion of being the benevolent custodians of the global dollar system and decided to use it instead as a bludgeon against geopolitical adversaries. Geopolitically, this was a watershed moment, and historians of the future will almost certainly see it as such.
But is it really the singular reason countries are scurrying to find alternatives to the dollar? The claim that de-dollarization is ultimately a response to US coercion sounds like something akin to a BRICS version of a Niemöller-style warning about indifference in the face of persecution: “First they came for Russia; next they might come for us.” The implication is that any country could be the next victim of Washington’s capricious wrath.
But hardly anyone stops to ask how realistic this actually is. Is China – a systemically central economy – really at risk of Russia-style sanctions? Would the US really dare to impose hardcore sanctions on India, Brazil, or BRICS-adjacent Türkiye? If the US can’t even get away with Trump’s Liberation Day tariffs without nearly blowing up the Treasury market, does anybody really believe it could freeze China’s reserves without five minutes later ushering in a financial crisis that would dwarf 2008?
Frankly, even sanctioning Russia, which by 2022 was already considerably decoupled from the US market, hasn’t gone all that well.
The quiet expropriation of wealth that nobody is supposed to notice
The real underlying driver of de-dollarization is economic in nature: the US will need structurally negative real rates in light of its high and rising debt load. For reserve holders, that implies a systematic erosion of purchasing power. In that sense, de-dollarization is not a political statement so much as an investment decision. This is a process that began well before the Russia sanctions and would have continued even in their absence.
Since 2014, foreign central banks have stopped buying US Treasuries on a net basis, while US deficits have continued to grow. This little-known pivot point will surely have a place of honor when the final account of the transition to a new system is someday written. In other words, even by 2014, the handwriting was clearly on the wall. The long-term trajectory of US fiscal and monetary policy was signaling trouble. US deficits were no longer episodic and induced by recession, but had become a permanent feature of the landscape.
Let’s fast-forward to 2022 – the year casually cited as the launching-off point for de-dollarization. Certainly, this was an important year and a number of statistics bear that out: central bank buying of gold – essentially a de-dollarization of reserves – spiked that year. But was it all because of the sanctions on Russia? It turns out there was something else going on around that time that may well have spooked a lot of players – especially China.
Over 2020-2022, US federal debt jumped from $23 trillion to over $30 trillion, an unprecedented rise outside of wartime, while the Fed’s balance sheet more than doubled from $4 trillion to $8.9 trillion. Meanwhile, the ostensibly exotic and temporary policy tool of quantitative easing introduced in the wake of the 2008 crisis turned out to be quite permanent. In other words, the troubling signals of 2014 now sounded as if blared through a megaphone.
By 2022, it had probably dawned on most of the world that the US has no credible path to fiscal sustainability and isn’t lifting a finger to find one, so it will almost certainly have to run negative real rates in order to erode the burden of the debt over time. To understand how negative real rates help manage debt levels, think of an extreme example: if you owed a sum of money in Weimar Germany, you would have found it a lot easier to pay it back once the deutschmark hyperinflated – just sell a pair of shoes and you can cover what was before a huge debt.
In fact, during this period of 2020-2022, real US yields were deeply negative: inflation was running around 7-8% (officially), all while the US 10y paid around 1.5%. Such a state of affairs decreases the purchasing power of the dollar. This is not a great option if you’re holding a whole bunch of Treasuries. Analyst Luke Gromen called this an “expropriation” of a nation’s wealth by the Americans. If you have to buy commodities in a currency that is being debauched – and commodities aren’t getting any cheaper – you have a serious problem.
You don’t have to have a PhD in economics to understand that debasement of the dollar and massive inflation is the eventual end-game. The only other option for the US is to let interest rates remain high and then suffocate under the burden of servicing its debt at higher rates – thus also inviting a massive credit crisis. When choosing between a quick death and a slow death, governments tend to choose the latter.
So, in 2022, holders of US debt the world over were staring at a significant loss in real terms. For a private investor, that’s unpleasant. For a central bank holding hundreds of billions in reserves, it’s existentially unsustainable. Deep within the bowels of economic policymaking circles in certain countries, I dare say this state of affairs focused minds no less than the repercussions of the Ukraine crisis.
Even though in 2023 real rates did return to positive territory (barely), the US hasn’t shown the slightest inclination of moderating its fiscal recklessness. It will continue to issue Treasuries at a high rate to cover ever wider deficits and pressure will remain on the Fed to monetize more debt in the next downturn. The problem is now structural and permanent.
Washington and BRICS agree: ‘Let’s not go there’
So, in light of all of this, why all the emphasis on geopolitics? Part of what is going on is the entirely natural mechanism of narrative creation in a world of short news cycles, shorter attention spans, and media-hyped geopolitical drama. Negative real yields and reserve composition don’t make good television, as they used to say. Dramatic geopolitical confrontations certainly do.
However, there is also deliberate obfuscation at play – and it comes from both sides of the geopolitical divide.
It hardly needs to be said that Washington makes every possible effort to downplay or deny the de-dollarization process. Most American and other Western institutions prefer to modestly divert their eyes from the palettes of gold being shoved into the central bank vaults of other countries. They go out of their way to quote statistics that show dollar use holding steady (such statistics can certainly be found).
But insofar as the theme of de-dollarization has to be addressed, Washington prefers what it sees as the lesser of two evils: acknowledging some collateral damage associated with the weaponization of the dollar rather than admitting the entire economic foundation of the dollar system is eroding before our eyes.
In April 2023, Janet Yellen conceded that “there is a risk when we use financial sanctions that are linked to the role of the dollar, that over time it could undermine the hegemony of the dollar.” For her, it is merely a question of calibrating a geopolitical tool to minimize the extent to which the rest of the world gets wild ideas about preserving the returns on their investments.
At a House of Representatives hearing from July 2023 called ‘Dollar Dominance: Preserving the US Dollar’s Status as the Global Reserve Currency’, Dr. Daniel McDowell, an international affairs professor at Syracuse University, gave a typical reading of this notion in his testimony:
“The more that the United States has reached for financial sanctions, the more it has made adversaries and foreign capitals aware of the strategic vulnerability that stems from dependence on the dollar. Some governments have responded by implementing anti-dollar policies, measures that are designed to reduce an economy’s reliance on the US currency for investment in cross-border transactions. Although these measures sometimes fail to achieve their goals, others have produced modest levels of de-dollarization.”
There you have it. The cost of pursuing America’s foreign policy agenda has to be acknowledged – but it mostly amounts to “modest levels of de-dollarization.”
Clearly, the US has a tremendous vested interest in keeping its teetering dollar hegemony going and doesn’t want to probe its weaknesses too deeply. Saying “we admit the Russia sanctions made some people uncomfortable” works a lot better than saying “we hope nobody notices that holding dollars in your coffers is a good way of eventually going broke.”
But that raises the question: what exactly does BRICS have to gain by emphasizing geopolitics over the economic angle?
Think about it like this. Let’s suppose you hold a whole bunch of bonds of a certain entity, but you don’t have much confidence in that entity. One thing you would definitely not do is go around broadcasting your doubts about that entity’s solvency. Doing so would be a good way to make the bonds you still hold a lot less valuable.
Now suppose you are actually selling some of those bonds – not fire-selling them, but gradually lightening up your holding on the margins. Because you’re a big holder, people notice. One thing that would be nice to have is some cover for what you’re doing so that you didn’t have to admit publicly that you don’t believe in the solvency of the issuer of your bonds. The moment you did so, the bonds you are still holding would lose a lot of value – not to mention you might provoke a panic that you yourself are unprepared for.
The bond issuer here is, of course, the US government and the bonds are US Treasuries and other related US debt securities. You better be a bit careful what you say unless you want to punch a big hole in your own portfolio, not to mention probably opening yourself up to some sort of unpleasant retaliation. China still holds an awful lot of dollar assets. Other BRICS countries (excluding Russia) also have sizable holdings.
What BRICS actually does is the following: they load up on gold as quietly as possible (gold is now the fastest-rising international reserve asset); they seek to boost non-dollar bilateral settlement; they secure local-currency swap lines; they buy shorter-duration Treasuries; they work on new financial infrastructure.
But what they say at the official level tends to be very bland and mostly standard fare about diversification or managing risk. China’s State Administration of Foreign Exchange (SAFE) is a hugely important institution – the real manager of the country’s reserves. It puts out annual reports that are, to put it gently, a bit dry to read. Importantly, it does not publicly frame its reserve shifts as a repudiation of US debt. Anyone looking for spicy rhetoric in a SAFE report tends to be sorely disappointed.
When the BRICS world does step up the rhetoric a bit, they tend to lean into the geopolitical angle: the US is abusing the privilege that comes with presiding over the system; the US applies double standards; the US is interfering in the sovereignty of other countries. These allegations are absolutely true and certainly factor in the calculations of BRICS governments. But this is also a way of underemphasizing what’s really exerting a magnetic pull on the de-dollarization process.
What we end up with, somewhat bizarrely, is two competing geopolitical blocs both dancing very gingerly around the elephant in the room.
This odd convergence of narratives found a perfect articulation in a Carnegie Endowment analysis from October 2024 titled ‘China’s Dollar Dilemma’. Carnegie is firmly situated within the Washington policy mainstream, so its framing is a reliable measure of establishment thinking.
The piece opens with a familiar claim: “Increasingly intensifying US economic sanctions targeting Russia’s financial system have deepened concerns in China over its extensive dollar asset holdings and the Chinese financial system’s reliance on dollars.”
From there, it selectively highlights only the motives that Chinese officials and scholars are comfortable stating in public: fear of sanctions, fear of asset freezes, and fear of US overreach. It cites an influential Chinese economist calling for reduced Treasury exposure due to sanctions risk, and quotes a prominent state-backed journal warning that China’s reserves are “increasingly becoming ‘hostages’” – a direct reference to the freezing of Russia’s central bank assets.
All of these points do appear in Chinese discourse, but precisely because this is what Chinese officials can safely say. US behavior can be criticized, but less so the dollar’s viability. China’s diversification is attributed to external threats, not to internal assessments about long-term returns, negative real yields, or the trajectory of US fiscal policy. These arguments sit comfortably within China’s public-facing narrative. Carnegie should know full well that China’s actual analysis of the matter extends far beyond what is presented publicly, but it made no attempt to probe that.
But these arguments also sit comfortably within the boundaries of Western establishment discourse. A sanctions-centric explanation allows American analysts to acknowledge discomfort among Global South countries without interrogating the deeper issue of whether US debt has become structurally unattractive. It preserves the image of the US as a rational, stable hegemon rather than a debtor whose fiscal trajectory and monetary regime impose losses on foreign reserve holders. There is no examination of how US fiscal expansion directly increases China’s exposure to interest-rate losses – hardly a trivial issue!
The result is telling: in a piece of nearly 5,000 words, the discussion of US debt sustainability is confined to a single sentence – one that merely projects debt levels out to 2050 without analyzing what those levels mean for the reserve asset status of Treasuries. A reader could easily conclude that China’s diversification is driven almost entirely by sanctions fears. But here’s the kicker: if that reader had been perusing the offering of BRICS publications, that conclusion would only have been reinforced.
The core irony is thus that a long, meticulously argued analysis produced at the heart of the Western policy establishment ends up mirroring the dominant narrative inside the BRICS world itself. Both sides emphasize geopolitics and sanctions risk, and both underplay the basic financial logic that makes US assets less attractive. They arrive at the same explanation for entirely different reasons – but the convergence is unmistakable.
A convergence indeed, but there is ultimately a difference. As far as I can tell, the Washington DC establishment actually believes its own propaganda, whereas the BRICS crowd knows exactly what the real score is and is carefully working to keep the system stable while it is slowly replaced.
A $100 million corruption scandal has infuriated the public and put Kiev’s Western backing at risk, the outlet has reported
Ukraine’s Vladimir Zelensky is scrambling to secure support from Western backers after being weakened by a $100 million corruption scandal involving a close ally, French newspaper Le Monde has reported.
The revelations of widespread corruption in Kiev could provide significant arguments for European politicians advocating for reduced aid to Ukraine and opposing its EU accession, the outlet wrote on Monday.
The anti-corruption probe by Ukraine’s Western-backed National Anti-Corruption Bureau (NABU) uncovered an alleged $100 million embezzlement scheme involving the state-owned nuclear energy firm Energoatom. Investigators have linked the controversy to Timur Mindich, a close associate and former business partner of Zelensky. Moscow has called the case evidence of a “bloody hydra” of Ukrainian corruption reaching beyond the country’s borders and draining Western taxpayers’ money.
France has demanded that Ukraine engage in a decisive fight against corruption as Zelensky arrived in Paris to seek military support from French President Emmanuel Macron on Monday.
“They know very well what our expectations are,” a source at the French presidency told the outlet, urging “transparency” and emphasizing “seriousness” in curbing corruption.
German Chancellor Friedrich Merz, one of Kiev’s main backers, reportedly pressured Zelensky during a phone call, stressing “the German government’s expectation that Ukraine press ahead energetically with fighting corruption and implementing further reforms, particularly in the area of the rule of law,” according to a spokesperson. Merz also reportedly urged Zelensky “to ensure that young men from Ukraine do not come to Germany in ever-increasing numbers, but rather serve in their own country.” The warning comes as young Ukrainian men, allowed to leave under a recent law, have increasingly sought to settle in Germany.
The scandal has outraged the Ukrainian public, weary after nearly four years of conflict, the outlet said. “The case shocked all of us a great deal,” an anonymous Ukrainian international relations expert told the French paper. “The situation is far from resolved. For now, we have more questions than answers.”
The graft scandal emerged as Kiev pushes its sponsors for a €140 billion ($160 billion) loan backed by Russian central bank assets frozen by the West – a plan that Moscow deems theft. Meanwhile, Le Monde noted, Russian forces are advancing on the eastern front, with the strategic city of Pokrovsk (Krasnoarmeysk) reportedly on the verge of falling amid a critical shortage of Ukrainian troops.
Using the belongings of new arrivals to cover costs could deter them from coming to the country
Asylum seekers arriving in the UK could have their valuables confiscated to help cover the cost of benefits, a British Home Office minister has said. The government of Keir Starmer is preparing to overhaul its immigration policy and reduce the number of arriving refugees.
High-value assets such as vehicles could be taken, Minister of State for Border Security and Asylum at the Home Office Alex Norris told the British media on Monday, before the formal statement by Home Secretary Shabana Mahmood to Parliament.
“It is right if those people have money in the bank, people have assets like cars, like e-bikes, they should be contributing… Those are assets they should contribute to the cost of benefits.” The Sun earlier reported that valuables such as jewelry and watches may be seized and sold to offset housing costs.
Norris insisted authorities would not be “taking people’s heirlooms off them at the border,” saying sentimental items would be exempt. “If someone comes over with a bag full of gold rings, well, that’s different to what I said about the heirloom,” he added, urging the public to wait for Mahmood’s full statement.
British media have linked the proposal to Denmark’s strict asylum model, under which the authorities may seize assets above a set threshold to fund support services and deter arrivals. Switzerland operates comparable rules, allowing the confiscation of cash or valuables above roughly €900 to contribute to an asylum seekers’ upkeep.
Mahmood’s wider immigration overhaul seeks to accelerate asylum decisions, expand detention capacity and reduce state spending on irregular arrivals. The UK has been reeling under a migration crisis for years, with government data showing that already around 111,000 asylum applications were filed in the first half of this year. The number of claimants has nearly doubled since 2021, a Home Office report found.
Meanwhile, support for the anti-immigration and EU-skeptic Reform party, led by MP Nigel Farage, has risen to 35%, with Labour and the Conservatives trailing behind at 20% and 17% respectively, according to a recent poll.
Finland reduced bilateral relations to “zero” by joining the US-led military bloc, the Kremlin has said
Finland has launched large-scale military exercises 100km from the Russian border, the Finnish Defense Forces (FDF) has said.
The new NATO member’s ‘Northern Strike 225’ artillery firing drills, which kicked off on Monday, will continue for a week at the Rovajarvi shooting range in the north-eastern part of the country, the FDF said in an earlier statement.
The war games brought together three Finnish brigades, the country’s border guards, and a Polish multiple rocket launcher battery, according to the statement.
A total of 2,200 personnel and 500 vehicles are taking part in the exercises, which the FDF said are needed “to train the army’s artillery system and develop its performance in demanding early winter conditions,” while also improving coordination between various units.
The commander of the drills, Lieutenant Colonel Kimmo Ruotsalainen, described ‘Northern Strike 225’ as “the most significant artillery and mortar firing exercise… where we will finalize the skills of the fire units.”
According to the Finnish military, the end of the year will be an “intensive training period” for its forces, with some 20,000 servicemen from the army, navy and air force taking part in exercises across the country between November and December.
Finland, which shares a land border of approximately 1,340km (830 miles) with Russia, abandoned its long-standing policy of neutrality and joined NATO in April 2023, citing security concerns over the Ukraine conflict. The next year, another Nordic nation, Sweden, also became a member of the US-led military bloc.
After the escalation between Moscow and Kiev in February 2022, Helsinki imposed several rounds of sanctions against Moscow and closed the border with Russia, hurting Finnish business that benefited from Russian tourists.
During the conflict, Finnish President Alexander Stubb has been one of the harshest critics of Russia in the EU, advocating for increased Western military aid to Kiev. Last week, Kremlin spokesman Dmitry Peskov labeled Stubb as a “militarist hawk.”
Peskov earlier said Russia previously “had no problems” with Finland and Sweden, expressing regret that the two countries effectively “reduced to zero” their relations with Moscow by “dragging NATO military infrastructure onto their territory.”
Moscow has dismissed claims that it has any plans to attack members of the US-led military bloc as “nonsense”
Russia could attack NATO as early as next year, German Defense Minister Boris Pistorius has said, while calling for the country to further ramp up a multi-billion-euro rearmament and militarization push.
Western officials, including Pistorius, have used the claim to justify huge military spending spikes, including the EU’s €800 billion ($928 billion) ReArm Europe plan and NATO members’ pledge to increase defense spending to 5% of GDP.
Moscow has rejected the accusations as “nonsense,” saying the West is using Russia as a “monster” to fuel tensions, expand military budgets, and distract from domestic problems.
In an interview with the Frankfurter Allgemeine Zeitung released on Friday, Pistorius said, “military experts and intelligence services can estimate when Russia will have rebuilt its forces enough to attack a NATO member in the east. We have always said this could be from 2029 onward.”
“Now, however, some say it’s conceivable as early as 2028, and some even believe we have already had our last summer of peace.”
Pistorius lamented the state of the military, which he said is bleak – with infrastructure “partly dilapidated” and personnel numbers “drastically reduced.” He added that it urgently needs structural updates, from procurement to arms stockpiles and manpower, citing the threat of an imminent Russian attack.
He went on to say that Germany “must respond quickly and decisively by strengthening our defense capabilities,” and outlined several initiatives in progress, from drone procurement to boosting the army reserve to 200,000 soldiers by 2030 and infrastructure projects such as reinforcing bridges in case the country is used as a transit point for military equipment.
Kremlin spokesman Dmitry Peskov warned that Pistorius’ comments do not “improve the situation,” and could push Russia to take preventative measures.
“Such militaristic rhetoric is increasingly heard from Europe,” Peskov told reporters on Monday. “Russia does not advocate any confrontation with NATO. But we may be forced to take measures to ensure our security.”
The legislation could target any nation maintaining trade with the country, according to the president
US Republicans are drafting legislation to sanction any country that trades with Russia, President Donald Trump has announced.
Since the escalation of the Ukrainian conflict, the US and its allies have imposed unprecedented sanctions on Russia, aiming to cripple its economy. Moscow has repeatedly condemned the restrictions as counterproductive and illegal, claiming they backfire on those who impose them. Russia maintains that its economy has adapted by redirecting trade to non-Western markets. “The Republicans are putting in legislation that is very tough sanctioning, et cetera, on any country doing business with Russia,” Trump told reporters on Sunday.
“I hear they’re doing that, and that’s okay with me.” He added, “They may add Iran to that. I suggested it.”
Senate Majority Leader John Thune indicated last month that he was prepared to bring to a vote legislation long advocated by hawkish Senator Lindsey Graham to impose “crushing sanctions” on Russia, though he hesitated to set a firm deadline.
The bill would empower Trump to impose tariffs of up to 500% on imports from countries purchasing Russian oil, gas, uranium, and other products if Russia does not agree to a lasting peace with Ukraine. The bill is specifically targeting China and India – major consumers of Russian energy.
Earlier this year, Trump announced a 25% tariff on India as a penalty for its purchases of Russian oil, claiming the trade was helping Moscow prolong the conflict.
The upcoming legislation would expand on a series of restrictions implemented by the Trump administration in recent months. Last month, the White House sanctioned Lukoil and another major Russian oil producer, Rosneft, as well as their subsidiaries, citing what Trump called a lack of commitment to the Ukraine peace process on the part of Moscow.
The Russian Finance Ministry stated earlier that in the event of “crushing sanctions” being introduced, Russia would diversify supplies of goods prohibited from export to the US.
Any Washington-installed replacement in Venezuela would require sustained support, according to analysts cited by the outlet
A US-backed regime change operation in Venezuela would plunge the Latin American country into chaos or force Washington into a years-long struggle to keep a replacement government afloat, CNN reported on Sunday.
The Pentagon has deployed warships to the Caribbean and has carried out controversial strikes on small boats it claims are involved in drug smuggling from Venezuela. The White House maintains that Venezuelan President Nicolas Maduro is an illegitimate, cartel-linked ruler, fueling speculation that direct military action might be imminent.
However, should President Donald Trump opt for forcibly removing Maduro, the US would face “fractured opposition elements and a military poised for insurgency,” along with a likely “political backlash at home” for violating Trump’s pledges to avoid new foreign entanglements, CNN argued.
Foreign policy hardliners – including Elliott Abrams, a veteran Republican human rights official who has long supported US-aligned dictators in Latin America – argue that Washington’s credibility is at stake.
“Trump is calling Maduro a narcoterrorist and a drug trafficker, and has assembled a huge armada,” Abrams told the network. “If he backs down now and Maduro survives, there goes all the ‘new Monroe Doctrine’ talk and the idea of being supreme in our own hemisphere.”
Washington has repeatedly failed at large-scale state-building ventures, despite pouring hundreds of billions of dollars into operations under both parties. President Joe Biden’s term started with a chaotic US withdrawal from Afghanistan, where American-trained forces collapsed to a Taliban insurgency even before the final foreign troop pullout.
According to CNN, some Republicans fear that a heavy-handed intervention in Venezuela would alienate voters. “The American people did not vote for Trump to draw the US into a sustained conflict in Latin America,” a GOP congressional staffer told CNN.
Sheikh Hasina has been found guilty in absentia of ordering the use of deadly weapons against protesters in a popular uprising
Bangladesh’s International Crimes Tribunal (ICT) on Monday handed down in absentia a death sentence to former prime minister Sheikh Hasina in a crimes against humanity case.
The verdict found her guilty of ordering a violent crackdown on student-led protests last year, according to media reports.
The charges against Hasina include murder, attempted murder, torture, and allegedly ordering the use of deadly weapons against the protesters.
“The verdicts announced against me have been made by a rigged tribunal established and presided over by an unelected government with no democratic mandate. They are biased and politically motivated,” Hasina said in a statement.
Hasina, who fled to India after the uprising in 2024, said in a recent interview with RT that the verdict was a “foregone conclusion.” She now lives in India.
Up to 1,400 people died, most by gunfire from security forces in the crackdown, per UN estimates. The protests ended after she fled the country.
Others who have been charged in the case are ex-Interior Minister Asaduzzaman Khan Kamal and former police chief Chowdhury Abdullah Al-Mamun. Al-Mamum was the only accused present in the court.
The chief adviser of the interim Bangladesh government currently running the country is Nobel laureate Mohammad Yunus. Bangladesh is slated to hold elections in 2026. Hasina’s Awami League, which had been in power for 15 years before the uprising, has been barred from participating.
Hasina is the daughter of Bangladesh’s first president, Sheikh Mujibur Rahman, who was assassinated in a 1975 military coup.
Ahead of the verdict, hundreds of protesters marched toward Dhanmondi 32, the former residence of Rahman.
The move would allow Washington to target the president’s assets and infrastructure, President Donald Trump claims
The US plans to designate the Venezuelan Cartel de los Soles, which it claims is led by President Nicolas Maduro, as a terrorist organization, the State Department has announced. According to a statement, the designation will take effect on November 24.
Trump has long accused Maduro of cartel links, calling him a “narcoterrorist.” Despite Maduro’s denials of the allegations, Washington dispatched a naval armada to the western Caribbean earlier this year, and since September, US forces have hit alleged drug-smuggling vessels near Venezuela. US officials also say Trump is considering strikes on cartel targets inside the country.
The State Department reiterated the claim on Sunday that the Cartel de los Soles is led by the “illegitimate” President Maduro and senior Venezuelan officials.
It added that “neither Maduro nor his cronies represent Venezuela’s legitimate government,” accusing them of corrupting the country’s institutions, directing “terrorist violence throughout our hemisphere,” and trafficking drugs into the US and Europe.
Trump said the designation would allow the US military to target assets of the cartel – and by extension, Maduro – and infrastructure in Venezuela. “It allows us to do that,” Trump told reporters on Sunday.
He added, however, that “we haven’t said we’re going to do that,” noting that the US “may be having some discussions with Maduro” first. “They would like to talk… we’ll see how that turns out.”
Trump did not elaborate on potential talks. It is unclear why he said the designation would allow strikes, as it would not permit attacks without separate authorization.
Maduro has dismissed the allegations and the military buildup as an attempt to overthrow him, while urging Trump to negotiate. In September, he sent a letter to the White House in which he said Venezuela has dismantled the drug networks, offering direct talks.
The gunmen targeted troops guarding the US Embassy, according to a military spokesman
US Marines guarding the embassy in the Haitian capital, Port-au-Prince, engaged in a shootout with suspected gang members last week, a military spokesman has said.
The Caribbean nation of almost 12 million has been gripped by violence since the assassination of President Jovenel Moise in 2021, with heavily armed criminal groups exploiting the power vacuum to increase their influence in Port-au-Prince and other areas. Haiti has been in a state of emergency for over a year.
The Marines returned fire after being targeted by suspected gang members late Thursday, US Marine spokesman Captain Steven J. Keenan said in a statement on Sunday.
There were no injuries among the US servicemen as a result of the incident, Keenan added.
The US State Department ordered nonessential US government employees and their families to leave Haiti in July 2023. It currently has a ‘Level 4: Do Not Travel’ warning for the country, citing the risk of kidnapping, crime, terrorist activity, and civil unrest.
In June, the head of the UN Office on Drugs and Crime, Ghada Fathi Waly, said the gangs had “approximately 90% of Port-au-Prince… under their grip,” while expanding their attacks to other areas that were previously peaceful. Control over key trade routes by criminal groups has crippled legal commerce, driving up the cost of essential goods such as cooking fuel and rice, Waly added.
According to UN data, at least 5,600 people were killed in gang-related incidents in Haiti in 2024, with 1.3 million across the country being displaced due to the crisis.
A Kenyan-led, UN-supported mission, which arrived in Haiti in 2024 to help curb the violence, was able to free the presidential palace in the capital and unblock several key roads, but could not achieve further progress due to a reported lack of personnel and equipment. Only around 40% of the planned 2,500 troops were deployed, according to AP.
Last month, the UN Security Council decided to reorganize the mission into the Gang Suppression Force, to be composed of 5,500 soldiers and police officers.
