Trump's Geopolitical Trifecta

The Credit Strategist Blog

Some quick thoughts regarding Venezuela.

As someone who has been calling for regime change in VZ for years, I strongly support President Trump’s move to seize illegitimate “President” Maduro and his wife and deliver them to the United States to face drug and weapons charged. But the indictment is clearly a pretext for a much more important geopolitical action to hopefully eradicate Russian, Chinese, and Iranian influence in America’s backyard (which means a similar move in Cuba should be next and is highly probable). Tracy Shuchart who writes an excellent Substack report called Renegade Resources detailed the activities of these three countries in VZ (“The Real Reason the Pentagon Approved Venezuela: Critical Minerals and Adversary Expulsion,” Jan. 3, 2025) which I will summarize here.

Iran has been manufacturing weapons in VZ for years. Iran’s Revolutionary Guards maintain an operational infrastructure in the country with Hezbollah operating alongside. Since 2020, Iran has transferred weapons capable of reaching any target in the state of Florida (weapons that were publicly displayed in VZ military parades in 2021 through 2023 - talk about painting a target on your back!). An Israeli defense research organization, the Alma Research and Education Center, catalogued the specific systems and notes they can target both American soil and ships in the Caribbean. Iran also outsourced drone production to VZ, establishing a permanent Iranian military-industrial presence 1200 miles from Miami. Iran’s presence also includes Zolfaghar fast attack boats armed with anti-ship missiles with 55-mile range that travel at 760 miles per hour which are offensive weapons.

Hezbollah networks in VZ include weapons, fundraising, logistics, and operational planning infrastructure. They operate in the tri-border region of Argentina, Brazil, Paraguay and on VZ’s Margarita Island. They provide Iran with intelligence, financial, and operational capabilities. The last I checked, there are very few if any Palestinians in VZ that need Hezbollah’s help.

Over 120 Russian troops operate in VZ under the command of same general that ran the operation to destroy the Kakhova Dam in Ukraine that caused catastrophic flooding. That general’s presence signifies the strategic importance Russia places on VZ. VZ’s military operates Russian-supplied Sukhoi Su-30 fighters armed with anti-ship missiles as well as other Russian air defense surface-to-air missiles. Russia continues to deliver military equipment and supplies to the country.

Finally, China’s domination of rare earth metals supply chains is enhanced by its presence in VZ. China is integrated into VZ’s mining and distribution of key minerals such as coltan, which is essential for manufacturing tantalum capacitors used in advanced electronic systems, missile guidance computers, and radar systems. Other key minerals include cassiterite and bauxite, nickel, rhodium and titanium. China’s close relationship with VZ effectively allows it to control VZ’s minerals despite its Western hemisphere location. With China weaponizing its control of rare earth minerals, VZ’s strategic importance grew significantly.

Finally, VZ owns the largest oil reserves in the world though production is down to about 750,000 barrels a day due to sanctions, disrepair of facilities, corruption, and incompetence. It will take several years to increase VZ’s oil production but eventually it will happen. As I wrote in my 2026 Outlook (“Welcome to Kingstown”), higher VZ oil output later this decade should assert downward pressure on oil prices which in turn will hurt Russia’s economy and geopolitical influence (as well as that of Saudi Arabia). But anyone expecting a quick drop in oil prices from higher VZ output is jumping the gun. Other factors should pressure oil prices this year but not this. This is a long-term play.

In short, under socialist rulers Hugo Chavez and Nicolas Maduro, VZ partnered with America’s strategic enemies to provide them with access to VZ’s natural resource wealth while weakening America’s geopolitical and strategic position. And America’s political leadership did nothing to stop it. Until now.

President Trump’s action provides the opportunity for the U.S. to break China’s supply chain control over rare earth metals, eliminate Russia’s and Iran’s military presence in VZ, and eradicate Hezbollah’s presence in the Western hemisphere. It is difficult to find fault with any of these strategic goals; in fact, failing to pursue them would constitute foreign policy malpractice of which U.S. leaders have frankly been guilty of for decades.

Critics argue that the military action was unlawful because Congress wasn’t consulted in advance. I strongly disagree. The threats posed to our country from the combination of Russian, Chinese and Iranian influence in VZ hit a tipping point at which the President needed to act to protect American citizens and American interests. He is charged with that responsibility under Article II of the Constitution. At this point in time, the action was justified. Now comes the harder part of helping VZ organize a government that represents the interests of its people and protecting American interests by insuring that the noxious presence of our enemies are flushed from the country.

Coupled with the crushing attack on Iran, President Trump’s action should give Russia and China serious pause regarding making future moves like the Ukraine war or any attack on Taiwan (some argue our move on VZ will encourage them to act but I disagree and frankly they don’t need any encouragement in any event). Watching our military should make any foreign dictator think twice about incurring America’s wrath. The world order, which was moving against America’s interests before President Trump took office, is now moving in our favor due to the bold actions not only of this administration but of our Israeli allies. Syria is broken; Iran is broken; VZ is broken. They were all proxies of Russia and China. Our enemies and their proxies started wars and we finished them. This is not time for going wobbly as the great Margaret Thatcher said. This is a time to support change that will strengthen America and the cause of freedom.