By Matt Spetalnick, Daphne Psaledakis and Marianna Parraga

WASHINGTON/HOUSTON (Reuters) – The Biden administration has signaled that it could reimpose oil sanctions on Venezuela on Thursday in response to what U.S. officials see as President Nicolas Maduro’s failure to meet his commitments for free and fair elections this year.

Barring any last-minute concessions by Maduro, the U.S. has made clear it is not likely to renew a six-month license that granted the OPEC member partial sanctions relief from October, following an election deal reached between the government and the Venezuelan opposition. It expires just after midnight EST (0400 GMT Thursday).

Washington had repeatedly threatened in recent months to reinstate punitive measures on Venezuela’s vital oil and gas sector unless Maduro made good on his promises, including allowing the opposition to run the candidate of its choice against him in the July 28 election.

Maduro’s government has complied with some of the terms of the deal, signed in Barbados.

The withdrawal of the most significant element of U.S. sanctions relief would mark a major step back from U.S. President Joe Biden’s policy of re-engagement with the Maduro government.

But the Biden administration is expected to stop short of a full return to the “maximum pressure” campaign waged under former U.S. President Donald Trump, according to people familiar with the matter.

Weighing on the U.S. decision have been concerns about whether reimposing sanctions on Venezuela’s energy sector could spur higher global oil prices and increase the flow of Venezuelan migrants to the U.S.-Mexico border as Biden campaigns for reelection in November.

“We have made very clear that if Maduro and his representatives did not fully implement their agreements under the Barbados agreement, we would reimpose sanctions, and I would just say stay tuned,” U.S. State Department spokesperson Matthew Miller told a daily briefing in Washington on Tuesday. He declined to elaborate.

Maduro’s government has repeatedly reacted with defiance the Washington’s warnings.

“International companies continue coming to Venezuela,” Venezuelan Oil Minister Pedro Tellechea said in Caracas. “With or without sanctions, Venezuela will be respected.”

Venezuela’s oil exports in March rose to their highest level since early 2020 as customers rushed to complete purchases ahead of the possible return of sanctions, Reuters reported this month.

DELIBERATIONS ON SANCTIONS OPTIONS

Deliberating on how far to go, Biden’s aides had discussed a range of options ahead of the expiration of the U.S. Treasury license that has allowed Venezuela to freely sell its crude, U.S. sources said. Among the steps they considered was allowing Venezuela to continue shipping oil but reimposing a ban on the use of U.S. dollars in such transactions.

Failure to renew the current license would not rule out the possibility that the U.S. could at some point issue a new version to replace it if Maduro starts to give ground on electoral commitments.

Without a general license, however, most foreign partners of Venezuela’s state-run oil firm PDVSA may have no other option but to increase pressure for individual U.S. authorizations, which they have been seeking for years.

A group of Republican U.S. senators sent a letter to Biden urging his administration not to renew the license, saying “we must not cede American leverage by lifting U.S. sanctions while the Maduro government deliberately disregards its obligations.”

The Biden administration initially re-engaged diplomatically with Maduro when the U.S. was looking for ways to get more oil on world markets to offset the rise in crude prices from Western sanctions imposed on Russia over its 2022 invasion of Ukraine. Those contacts led to a deal for easing some of the harsh Trump-era sanctions on Caracas.

Miller acknowledged to reporters that Maduro has “upheld certain aspects” of the Barbados agreement, including setting an election timetable and inviting international observers.

But Venezuelan election authorities have maintained an election ban on Maria Corina Machado, who resoundingly won the opposition primary last October, and the opposition is currently holding internal negotiations about who could run as a substitute.

Maduro’s 2018 re-election was rejected by the U.S. and other Western governments as a sham.

The U.S. has also decried a string of arrests in recent months of opposition politicians and activists.

WASHINGTON (Reuters) – Sharply higher tariffs on Chinese metal products being considered by the Biden administration would not affect U.S. inflation and are necessary for national security, White House economic adviser Jared Bernstein said on Wednesday.

“If we don’t take action, we’re putting at risk about one of our most critical sectors — what the president calls the backbone of the American economy, the bedrock of our national security — and that’s domestic steel production,” the chairman of the White House Council of Economic Advisers told CNBC.

U.S. President Joe Biden on Wednesday will call for sharply higher tariffs on Chinese steel and aluminum as part of a package of policies aimed at pleasing steelworkers in the swing state of Pennsylvania, at the risk of angering Beijing.

Bernstein said such tariffs would not have a negative effect on the U.S. economy.

“This is a targeted intervention that shouldn’t have much impact at all on inflation,” he said in an interview with CNBC.

By Trevor Hunnicutt and David Lawder

WASHINGTON (Reuters) -U.S. President Joe Biden will call on Wednesday for sharply higher tariffs on Chinese metal products as part of a package of policies aimed at pleasing steelworkers in the swing state of Pennsylvania, at the risk of angering Beijing.

In campaign stops in the “Steel City” of Pittsburgh, Biden is expected to propose raising to 25% the tariffs imposed by his predecessor Donald Trump on Chinese steel and aluminum products, according to an administration official.

The products targeted currently face up to a 7.5% levy under a Trump-era policy under Section 301 of the U.S. trade law, under a review Biden ordered in 2022.

The Biden administration is also pressuring neighboring Mexico to prohibit China from selling its metal products to the United States indirectly from there.

At the same time, it is launching an investigation into Chinese trade practices across the shipbuilding, maritime and logistics sectors, which could lead to more tariffs.

The measures, set to be unveiled as Biden visits the headquarters of the United Steelworkers union, will invite blowback from China at a time of already heightened tensions between the world’s two biggest economies.

Trump’s imposition of tariffs during his 2017-2021 presidency prompted China’s retaliation with its own levies.

Pennsylvania is one of a half-dozen battleground states likely to decide the November election rematch between Biden and Trump. The economy ranks among voters’ top concerns.

Jared Bernstein, director of the White House Council of Economic Advisers, said on Wednesday the “targeted intervention” being considered by the Biden administration should not worsen persistently high inflation.

“If we don’t take action, we’re putting at risk about one of our most critical sectors – what the president calls the backbone of the American economy, the bedrock of our national security – and that’s domestic steel production,” he told CNBC.

KEY VOTING BLOC

Biden and his Republican opponent have each courted union leaders and blue-collar workers in faded industrial hubs who comprise a significant voting bloc in Pennsylvania and Michigan, another swing state.

The steelworkers union, which sought the measures Biden is now adopting, endorsed him last month.

Biden handed the union another win when he came out last month against a proposed $14.9 billion bid by Japan’s Nippon Steel to buy U.S. Steel Corp.

Both 2024 candidates have sharply departed from the pro-trade consensus that once reigned in Washington, capped by China’s joining the World Trade Organization in 2001.

Trump, who withdrew from the would-be Trans-Pacific Partnership trade deal in 2017, has proposed a 10% tariff on all imports if he returns to office.

China was the seventh-largest exporter of steel to the U.S. in 2023, with shipments of 598,000 net tons, down 8.2% from 2022, according to U.S. Census Bureau data compiled by the American Iron and Steel Institute, an industry trade group.

Canada was the top exporter to the U.S., with 6.9 million tons, followed by Mexico, with 4.2 million tons.

Domestic steelmakers shipped 89.3 million net tons of steel in 2023, according to AISI data.

Any new levies on steel and aluminum would be subject to the approval of Biden’s appointed trade representative, Katherine Tai, at the completion of the review of the Trump-era tariffs.

The new levies would come on top of 25% Section 232 national security tariffs also imposed by Trump on steel and aluminum products and product-specific anti-dumping and anti-subsidy duties that often reach into the triple-digit percentages.

China’s economy grew by a faster-than-expected 5.3% in the first quarter, data showed on Tuesday, as the country has turned to exports to shore up growth in the face of protracted weakness in the property sector and mounting local government debt. Beijing regards Trump-era tariffs as discriminatory.

Officials said they expected Chinese exports to start flooding global markets, concerns raised by Biden Treasury Secretary Janet Yellen on a trip to the country last week.

China exported 25.8 million tons of steel products in the first quarter, the highest for the period since 2016 and a rise of 30.7% year on year, Chinese customs data showed.

“China cannot export its way to recovery,” Biden’s top economic policymaker, Lael Brainard, told reporters.