Hundreds gather in front of the US Embassy in Brussels, Belgium on January 4, 2025. Photo: Dursun Aydemir/Anadolu via Getty Images.
By Dean Baker – Sep 1, 2026
Donald Trump is not very good at running the economy, but he does have a great imagination about how he runs the economy. Trump continually boasts about the incredible amount of foreign investment coming into the country. It was $20 trillion last I heard, but it might be up to $30 or $40 trillion the next time Trump decides to boast about it.
This boast has absolutely nothing to do with reality. Contrary to what Trump says, there is no boom in auto factories or any other factories coming into the United States. Factory construction has actually plummeted since Trump came into the White House, after booming under Biden.
The looniness about the investment boom should be kept in mind when considering Trump’s deal to take control of 65 billion barrels of Venezuela’s oil. Trump is promising that this deal will both lower gas prices and be used to refill the Strategic Petroleum Reserves that he has largely drained as a result of his war on Iran.
While people are naturally offended by the blatant imperialism in this deal, that is precisely the reason why there is not much cause to be concerned. The basic story is, because the deal is so transparently an effort by the United States to steal oil from a country that it controls militarily, it is virtually guaranteed that as soon as the country is not run by a U.S.-installed dictator, Trump’s deal will be dumped in the trash.
This point was well-made by Venezuelan economist and opposition leader Ricardo Haussman (also cited in a piece by Michael Tomasky in The New Republic). The deal is seen as a joke by pretty much everyone in Venezuela.
If Venezuela doesn’t honor this deal, what will a future administration do, take them to court? Or will they send U.S. soldiers to die for Venezuela’s oil?
In terms of its immediate impact, there is not some spigot that can be turned on that will get massive amounts of Venezuela’s oil flowing. It’s currently producing around 1.25 million barrels a day. While it has massive reserves, its production facilities deteriorated badly as a result of U.S. sanctions. The country was largely unable to get needed parts, and it lacked funding because it was prevented from selling its oil to much of the world.
Oil production can only get back to its 3 million barrel a day turn-of-the-century pace with billions of dollars of foreign investment. It is unlikely that this deal will make companies happier about putting large sums at risk. Any investment will only pay off over many years, long after Trump will be out of office.
It also is not plausible to use Venezuela’s oil to refill the Strategic Reserves. Venezuela’s oil is very heavy and highly acidic. The Strategic Reserve is designed for light, alkaline oil. It could not easily store Venezuela’s oil.
In short, file Trump’s Venezuelan oil deal with the $60 trillion in foreign investment pouring into the country. It exists only in his head.
(CEPR)
