Maduro’s capture triggers a review of the TACO mantra

2026 began with the global acknowledgement that the TACO mantra (Trump Always Chickens Out) does not apply to foreign policy, as shown by the capture of indicted Venezuelan ex-President Maduro. We believe this sends a clear message to leaders of small and medium-sized countries opposing or refusing to cooperate/negotiate with the Trump administration: the US is prepared to threaten with the use of force more actively to achieve its foreign policy goals, having established credibility to act when negotiations fail.

• For larger, and militarily powerful countries, such conclusions are less straightforward. Additionally, if the issue risks significant costs to the US economy, stock market, or administration’s popularity, TACO may still apply. In other words, threatening with this kind of action is unlikely to secure a trade deal with China or force a peace agreement in Ukraine. Moreover, the move doesn’t mean that the US can now do anything anywhere. US domestic legal constraints still exist. It’s important to remember that Maduro is an indicted criminal and was not recognized as Venezuela’s legitimate president under US law; similar to Panama’s President Noriega was in 1990.
• This further blow to the weakened Liberal International World Order is not a risk-off event, risk assets continued to perform well. Unlike Russia’s invasion of Ukraine, the weekend events are expected to have a long-term negative impact on oil prices but minimal short-term effect. No major trade, financial, or energy disruptions are anticipated that would negatively affect the market.

Cuba, Hezbollah, and Iran are more likely to be targets of these types of threats and actions

Secretary of State Marco Rubio stated about Cuba, “If I lived in Havana and I was in the government, I’d be concerned.” However, Cuba lacks market relevance. The events in Venezuela are likely to impact Iran, where ongoing protests have prompted warnings from Donald Trump against violent repression. Similar dynamics affect Iran’s proxy in Lebanon, Hezbollah, as a US-backed plan aims to restore the Lebanese state’s monopoly on weapons and reduce Hezbollah’s military influence. The US sees Hezbollah’s armed autonomy as a major destabilizing factor in Lebanese politics and a regional security threat. Washington’s efforts are part of a broader strategy to strengthen state institutions, limit militia power, and support a lasting ceasefire with Israel.

Coercing large and powerful players isn’t as straight forward but increased US credibility to act on the military level still matters here

The recent strengthening of the Monroe Doctrine does not necessarily increase the likelihood of China taking over Taiwan. As highlighted by our colleagues at TwentyFour, the new US National Security Strategy, published in November 2025, increases the focus on the Western hemisphere and explicitly makes references to enforcing the Monroe Doctrine. However, it also underscores Taiwan's strategic importance due to its semiconductor dominance and its location as “one-third of global shipping passes annually through the South China Sea”. Thus, we think that, while this new world order in which the Monroe Doctrine dominates and international law appears less relevant, could be interpreted as increasing the probability of China eventually taking military action against Taiwan. But, the US also has powerful and now more credible deterrents it can deploy to avoid such a scenario, and it has explicitly stated Taiwan’s security as one of its main national security priorities.

Russia is not an easy target like Venezuela, but the US will probably not stay idle waiting for a Ukraine deal. Trump has recently expressed dissatisfaction with Putin over the Ukraine peace talks. Rubio’s warning – “don’t play games when this president is in office, because it’s not going to turn out well” – is difficult to apply to a military and nuclear power like Russia. This reinforces the view that a more coercive policy is easier to enforce on smaller states. However, the US administration is unlikely to stay idle if Ukraine peace negotiations stall, and additional pressure will likely be applied to fulfill one of Trump’s key campaign promises.

Brazil and India continue to negotiate trade deals with the US. We think it’s better to separate trade and economic affairs from foreign policy affairs. The TACO trade may still apply for the most market-moving and trade-related events that would directly affect the US economy while no longer applying to foreign policy matters when the US has the upper hand, especially if it can lead to a clear easy victory for the administration as was the case with the capture of Maduro. Brazil and India are not adversaries of the US, in our view, and therefore we don’t draw direct conclusions for these large and not adversarial countries, despite Lula’s opposing ideology.

Colombia’s lack of cooperation in the war on drugs was noted, but no major actions are expected soon. Trump used aggressive language about President Petro during his Venezuela press conference. In September 2025, the US designated Colombia, Venezuela, and Bolivia, among others, as "having failed demonstrably during the previous 12 months to both adhere to their obligations under international counternarcotics agreements”. Bolivia's newly elected right-wing government is expected to cooperate more actively. Colombia’s May elections are likely to result in a right-wing or centrist candidate defeating the left in the June runoff, which would normalize counternarcotics cooperation. However, if left-wing candidate Iván Cepeda wins, the US may pursue coercive measures if cooperation does not improve. Although Petro’s US visa was revoked last September, with only seven months left in his term, radical measures appear unnecessary and unlikely.

The Venezuelan regime remains in power, likely cooperating to survive. Vice President Delcy Rodriguez has assumed the presidency, while Maduro’s inner circle retains their positions. Although Trump claims the US is running the country, this seems exaggerated. The US will likely influence oil, counternarcotics, and migration policies, but it is unrealistic to think Marco Rubio and others can govern Venezuela remotely. A gradual transition to democracy is expected over the next two years, though it remains uncertain. While working with the current regime may be distasteful for most Venezuelans, it significantly reduces the risk of a chaotic and violent power struggle.

It is uncertain whether the regime will fully cooperate with the US administration due to their opposing ideologies. Therefore, a second US military operation cannot be ruled out if cooperation fails. However, in our view the regime’s survival instinct against a credible US threat makes some level of cooperation the most probable outcome.

Venezuela’s oil production will take many years to recover, as US and international oil companies are unlikely to invest tens of billions without clear legal and political guarantees. Large investments are improbable until there is regime change. Although Trump remains in power for three more years, oil projects require a longer investment horizon. Without regime change, the US cannot ensure the Venezuelan regime won’t expropriate oil companies again once Trump leaves office. Even if the current government enacts a new hydrocarbons law offering favorable terms – such as low royalties and full compensation for past expropriations – an opposition government could later revoke these terms, claiming they were imposed under duress from US military pressure and thus lack international enforceability. This mirrors Ukraine’s argument in UK courts to repudiate a USD 3 billion loan from Russia it accepted in December 2013 under duress.

The long-term impact on global oil prices is expected to be modestly negative. Although Venezuela holds the largest proven oil reserves, it only produces about 1 million barrels per day – less than 1% of the global supply. Even optimistically, production might increase by 50% (0.45% of global supply) within two to three years and triple (under 2% of additional global supply) over the next decade, returning to pre-Chavez levels. Oil production has been gradually recovering since 2020 and may continue under partial cooperation, but significant growth requires a complete regime change.

Replicating such a move in other countries would, in most cases, be far more complex from a legal perspective. Importantly, Maduro was an indicted criminal under US law and not recognized as Venezuela’s legitimate president by the US and its allies. While the operation raises legal questions domestically and internationally, the US administration has arguments to justify its actions under domestic law. Trump didn’t like TACO, and aims to regain credibility by capturing Maduro, creating global uncertainty to secure better deals for the US. However, extracting an indicted criminal who was not recognized as a legitimate President by the US and its allies differs greatly from acting against a NATO member without legal justification. Most market participants understand this, explaining why this is not a risk-off event.