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May 4, 2019 | 19:37 GMT

8 mins read

The Weekly Rundown: Failed Uprising in Venezuela, U.S.-China Trade and Targeting the Muslim Brotherhood

Opposition supporters clash with Venezuelan security forces in Caracas on April 30, 2019.
(YURI CORTEZ/AFP/Getty Images)
Stratfor's geopolitical guidance provides insight on what we're watching out for in the week ahead.

On the Record

I'll tell you what the coup is. The coup is the Cuban presence in Venezuela that I think controls Nicolas Maduro.

U.S. national security adviser John Bolton


On Our Radar

An Attempted Uprising Fizzles in Venezuela. Once again, Venezuelan opposition leader Juan Guaido tried — and failed — to trigger a military uprising to unseat President Nicolas Maduro. Despite the White House's long list of military commanders who were supposedly signed up for the uprising, only one senior commander publicly rallied to Guaido's side. Guaido's biggest liability is the fact that the bulk of Venezuela's military elites, many of whom face the threat of extradition to the United States, don't find Guaido's amnesty offers convincing enough to switch sides. Now, we turn to the question of what the main external players will do next:

  • The United States. There are a lot of rumors circulating that national security adviser John Bolton is pushing for a military escalation in the wake of the failed uprising. But this week's events only accentuate the fact that Washington does not have military commanders on the ground to support an uprising. We'll be keeping an eye on U.S. military movements (two U.S. aircraft carriers in the western Atlantic are positioned to respond to a crisis in Venezuela). Given the constraints, though, we're more likely to see Washington resort to economic coercion in the form of secondary sanctions that would take more Venezuelan crude offline.
  • Russia. The United States' failed uprising gambit could compel Moscow to send more military reinforcements to Venezuela, or at least use the threat of military reinforcements to drive Washington toward a broader negotiation.
  • Brazil and Colombia. Even as Washington has close allies in Bogota and Brasilia, these regional powers remain reluctant to participate in military options to overthrow Maduro, including the risks that come with hosting armed dissidents.
  • Cuba. Similar to how it's managing Iran, the White House is trying to use a maximum pressure economic campaign against Cuba to force Havana to drop its support for Maduro in exchange for sanctions relief. We don't think this will work. Havana is more likely to reinforce its military and security support for the Maduro government.

Nearing a U.S.-China Trade Deal. Following U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin's meetings in Beijing this week, Chinese negotiator Liu He will lead a Chinese delegation to Washington on May 8 to continue trade talks. Rumors indicate that the White House is dropping or at least lowering its demands on cyber espionage, state-owned enterprises and regulatory data protection for U.S. pharmaceutical products in trying to secure a quicker win with China. The rumored plan would entail immediate removal of the 10 percent tariff on a portion of the $200 billion worth of Chinese imports hit with tariffs and a scheduled phaseout of remaining sanctions. The 25 percent tariffs would reportedly stay in place, at least until after the 2020 presidential election. We are likely to see some restructuring of the tariff list as the United States pushes China to replace or remove its tariffs on U.S. agricultural goods. The thorny issue of enforcement remains under discussion. We'll be watching to see how Congress reacts to leaks of a watered-down deal and whether that complicates the negotiating process.

The U.S. Maximizes Pressure on Iran. Sanctions waivers for Iran's oil customers ended this week and the sanctions showdown between the United States and other countries may now finally get started. Although it will take time to know how successful sanctions on Iran's oil will be, the Trump administration is planning to more aggressively enforce other sanctions, including sanctions on gold, precious metals and the auto sector, as it tries to starve Iran of hard cash. The U.S. Treasury Department has yet to punish violations of those sanctions since they were reintroduced in August. The countries to keep the closest eye on include China, India, Malaysia, Turkey and the United Arab Emirates.

The AMLO Agenda. Mexican President Andres Manuel Lopez Obrador has a few big agenda items coming up. Lopez Obrador fell short of the 10 Senate votes he needed to overhaul education reform, but he'll try again on May 14. Success in winning over a handful of senators could open the door to other controversial constitutional reforms, like a pending reform to allow binding referendums on virtually any subject. We'll be watching to see how the Supreme Court rules on Lopez Obrador's big populist legislation to cap federal salaries. And we'll be monitoring a series of nationwide protests on May 5 by a previously unknown group calling itself Yellow Vests MX to see if there's a legitimate anti-anti-establishment movement brewing in Mexico.

South Africans Head to the Polls. South Africa's May 8 elections will be a referendum on President Cyril Ramaphosa's relative pro-business and anti-corruption policies amid lackluster economic growth. Should the ruling African National Congress perform well enough, Ramaphosa and his allies will have a stronger hand to carry out difficult — but critically-needed reforms — like overhauling South Africa's ineffective electricity monopoly, Eskom. However, should the ANC slip at the polls, populism within the ruling party could be ascendant, forcing Ramaphosa to turn leftward to shore up his legitimacy. With land expropriation without compensation still on the agenda but lacking in detail, the outcome of the May 8 vote will affect this and other key issues.

A Labour-Tory Compromise? The British government and the opposition Labour Party could be close to a compromise deal on a Brexit withdrawal agreement that would aim at meeting "the merits of a customs union" with the European Union — a vague definition that would allow Conservatives to keep the dream of signing free trade agreements around the world alive, while also allowing Labour to claim victory on its demand to keep the country in the Continental bloc's customs union. In the meantime, local elections on May 2 saw both parties lose seats to smaller parties, an indication that voters are punishing the United Kingdom's mainstream parties for failing to come up with a clear position on Brexit. Another poor performance by the Conservatives in this month's elections for the European Parliament could lead to stronger calls for Prime Minister Theresa May's resignation.


On Our Minds

The Muslim Brotherhood as a Terrorist Organization? Following its decision to brand Iran's Islamic Revolutionary Guard Corps (IRGC) a terrorist organization, the White House is now seriously considering designating the Muslim Brotherhood as a foreign terrorist organization. Egyptian President Abdel Fattah al-Sisi reportedly made the request during a recent visit with U.S. President Donald Trump. We still need to see if the White House intends to narrow its focus to only the Egyptian Muslim Brotherhood, or if it expands its sanctions scope to the Muslim Brotherhood at large. In case of the latter, the United States would be opening up a huge can of worms for itself in terms of legal precedent as well as its foreign policy in the Middle East. The Muslim Brotherhood is an ideological movement, driven by a strong Islamist political current that runs throughout the region. While the IRGC can be clearly linked to terrorism, not all Muslim Brotherhood affiliates espouse political violence. In several countries, including Turkey, Tunisia and Jordan, supporters, affiliates and members of the Muslim Brotherhood are integral components of the government. The United States could well hamper its ability to work with important political elements of these states.

The terrorist designation could also be counterproductive to U.S. counterterrorism strategy, as the more Muslim Brotherhood entities are driven underground, the more susceptible their members may be to more extremist Islamist groups. As we saw with Trump's willingness to initially follow the Saudi and Emirati lead in isolating Qatar, this may be another example of the U.S. president willing to grant political favors to his allies despite the long-term national security ramifications.


In Case You Missed It

Agriculture Is Still Vital to U.S. Trade Talks — for Now

Russia's Defense Industry Finds Itself in a Tailspin

Why Business as Usual May Soon Change in Saudi Arabia


On Our Calendar

In the coming week, U.S. Secretary of State Mike Pompeo and Russian Foreign Minister Sergei Lavrov will meet on the sidelines of a ministerial meeting of the Arctic Council in Rovaniemi, Finland; another round of U.S.-China trade talks get underway in Washington; and South Africans vote for a new parliament and provincial legislatures. For more, see our Geopolitical Calendar.


Join the Discussion

Within the context of its great power competition with Russia, how might the United States react to a larger Russian military foothold in Venezuela?

Will new data showing Italy is out of recession help alleviate European Union concerns about Rome's ability to keep its deficit in check?

Visit The Daily Round-Up to join more discussions with Stratfor members.

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