China Deepens Footprint in Venezuela — 'Zero-Tariff' Pact Tests U.S. Influence

China expands economic and strategic ties with Venezuela amid rising U.S. pressure

Beijing has moved quickly to deepen its economic and strategic presence in Venezuela, unveiling a "zero-tariff" trade pact at the Shanghai Expo 2025 even as the United States increased military and diplomatic pressure on Caracas.

U.S. military presence and Venezuelan response

U.S. defense officials told Reuters that a U.S. aircraft carrier strike group, led by the USS Gerald R. Ford and carrying more than 4,000 sailors and dozens of tactical aircraft, entered the U.S. Southern Command area — which covers the Caribbean and the northern coast of South America — to monitor narcotrafficking routes allegedly linked to elements of Venezuela’s military. Pentagon officials said the deployment would "bolster U.S. capacity to detect, monitor, and disrupt illicit actors and activities," and aimed to "degrade and dismantle transnational criminal organizations." According to reporting, Venezuelan officers have reportedly rehearsed guerrilla-style defenses amid rising anxiety in Caracas.

The zero-tariff pact and Beijing's objectives

At Shanghai Expo 2025, Deputy Minister for Foreign Trade Coromoto Godoy announced a tariff-free arrangement that Venezuelan officials say would eliminate duties across roughly 400 tariff categories. While details on implementation and enforcement remain to be clarified, the accord signals Beijing's intent to open a tariff-free trade corridor into an economy long constrained by U.S. sanctions.

"This really looks like China is going to completely take over the Venezuelan economy," said analyst Gordon Chang, warning that Chinese manufacturers could outcompete Venezuela's limited industrial base, which remains heavily reliant on oil exports.

Loans, infrastructure and strategic access

The Council on Foreign Relations estimates that China has extended about $60 billion in loans to Venezuela over the past two decades, much of it repaid through oil shipments — a figure still cited by Chinese and Venezuelan officials in 2025. Analysts note that commercial ties have been accompanied by infrastructure cooperation, including the El Sombrero satellite ground station in Guárico province, a joint China–Venezuela project that Western reporting describes as part of a broader space-cooperation network that could provide Beijing with an intelligence foothold in the region.

Security concerns and regional implications

Isaias Medina III, an Edward Mason Fellow at Harvard and a former Venezuelan diplomat to the U.N. Security Council, framed the pact as one layer in a wider geopolitical alignment. He pointed to long-standing ties between Caracas and states such as Russia, Iran and Cuba — including arms sales, defense cooperation and the presence of foreign advisers — and warned of the regime's links to organized crime and transnational illicit networks.

Analysts emphasize limits to China's ability to counter U.S. military power in the region. "China can deepen economic ties and run a major public-relations campaign, but it cannot project the kind of military force needed to oppose U.S. intervention," Chang said. Observers note that U.S. sanctions and diplomatic pressure continue to complicate Caracas's oil lifelines, and that threats of additional measures have at times disrupted shipments.

What to watch

The unfolding alignment between Caracas and Beijing raises several questions: how China will operationalize the tariff-free agreement under existing sanctions pressures; whether Beijing will expand its strategic footprint beyond commercial and space projects; and how Washington and its allies will balance diplomatic, economic and defensive measures in response. The situation underscores broader geopolitical competition in Latin America and has implications for regional security, trade and humanitarian conditions in Venezuela.

Sources: Reuters, Associated Press, Council on Foreign Relations; statements from named analysts and officials.