U.S. President Donald Trump on Friday announced a rollback of some parts of former President Barack Obama’s thaw with Cuba by expressly prohibiting tourist travel to the island, restating the importance of the U.S. embargo with Cuba and banning Americans from conducting financial transactions with companies under the control of Cuba’s military. What is the significance of the changes for Americans and for U.S. businesses? How will the changes affect Cuba? What are the reasons behind Trump’s decision?
Otto Reich, president of Otto Reich Associates LLC and former assistant secretary of state for Western Hemisphere Affairs under President George W. Bush: "Asking why President Trump is rolling back some of President Obama’s Cuba policies must be preceded by asking why President Obama promoted an opening so incompatible with U.S. values. Pretending to help Cuba’s oppressed population, Obama sided with the oppressors. Obama said his policy was intended to ‘empower’ the Cuban people, but the one truly empowered by the ‘historic opening’ (a term the media repeated ad nauseam) was the military-industrial complex of a one-party communist state, with the United States getting nothing in return. Enjoying the long-sought diplomatic recognition of the world’s leading democracy, the Castro dictatorship redoubled its political repression. More than 10,000 arrests of dissidents have happened since the ‘historic opening.’ Raúl Castro welcomed Obama to Cuba on his 2016 visit by openly beating a group of unarmed women who were marching silently on their way from Palm Sunday Mass. The leader of the free world did not protest this gross violation of human rights—or any other—because of his need to protect what he hoped would be seen as a rare foreign policy legacy. Trump’s reversal of Obama’s blunder will keep Americans from partnering with a military dictatorship’s monopolies. Most Americans don’t know that when they fly to Cuba, dock on a cruise ship, stay at a hotel, rent a car, buy gasoline or smoke a cigar, they are putting money into the pockets of entities like Gaviota, GAESA and the other government conglomerates that own Cuba’s economy, some of which, in dynastic fashion, are run by Raúl Castro’s son-in-law. Those dollars also fortify a Cuban military establishment that cooperates with fellow police states Syria, North Korea and Iran, and that supervises the lethal brutality of the Venezuelan security forces. Trump’s action has just taken one important step to making the United States an ally of the oppressed in those countries instead of the oppressors."
Fernando X. Donayre, chief investment officer and founder of INCA Investments in Miami: "While vowing to ‘help the Cuban people themselves form businesses and pursue much better lives’ President Trump’s recently announced changes will unfortunately have the opposite effect. The most dramatic change he announced is the elimination of individual people-to-people travel to Cuba, which will significantly curtail travel to Cuba by Americans. The result will be to meaningfully lower the income of Cuban taxi drivers, tour guides, waiters, artisans, hotel service workers and the new breed of Cuban entrepreneurs who have benefited from the increase in U.S. travelers who rent rooms in their homes and eat at their private restaurants. They form the core group of Cuba’s nascent middle class. If you want to help the Cuban people, as President Trump purports to do, you should encourage more, not less, travel to Cuba. The only other significant change in Cuban policy that President Trump announced was the banning of U.S. entities from conducting business with the Cuban military. Ironically, those U.S. institutions that directly or indirectly work the most with the Cuban military—U.S. airlines, cruise companies and more recently, Marriott hotels—will be exempted from this rule. While there will be associated benefits that flow from these U.S. companies to the Cuban military, the greatest beneficiaries will be the Cuban people. Those of us who have been traveling to Cuba for some time have seen first-hand how the influx of U.S. travelers to the island has benefited the Cuban people. President Trump has failed to grasp this simple, but changing dynamic in his misguided effort to please the hardline minority of Cuban-Americans who believe the failed U.S. policies of the past should continue even as the opportunities for the Cuban people evolve."
Matthew Aho, special advisor on Cuba for the corporate practice group of Akerman LLP in New York: "President Trump’s Cuba policy speech—delivered alongside its chief architects, Sen. Marco Rubio and Rep. Mario Diaz-Balart, was a startling return to the macho Cold War-era posturing and fiery rhetoric of past Republican administrations that have kowtowed to South Florida’s shrinking hardline Cuban-American constituency in exchange for loyalty at the polls. The only difference now is how senseless and divorced from reality the president’s words and actions seem. Over the past decade, the Cuban government under Raúl Castro has undertaken a series of economic and political reforms that—however imperfect and incomplete—have fundamentally altered life on the island. Nearly every U.S. visitor is struck not only by the warmth and hospitality of the Cuban people, who welcome Americans like long-lost cousins, but also by the proliferation of small businesses on the island and by Cuban entrepreneurs’ willingness to push boundaries and criticize their own government’s excesses. U.S. businesses have embraced the opportunity to rebuild long-dormant ties with Cuba, generating billions in new revenues and thousands of new jobs. Normalization isn’t a bad deal; it is a win-win that puts America’s interests first, while extending our full-fledged support to the Cuban people. While the severity of the damage that Mr. Trump’s Cuba policies will cause to U.S businesses and jobs now depends largely on how many new regulations the administration ultimately imposes, the sour tone he has set will resonate for months and years to come. For every U.S. deal the White House scuttles, there will be Russian and Chinese-speaking suitors in waiting."
Jorge Sanguinetty, chairman and senior advisor at DevTech Systems: "In his policy statement regarding U.S.-Cuba relations, President Trump recognizes a critical condition of the Cuban political economy, almost always ignored by observers of Cuban affairs: the fact that the country’s economy is strictly segmented into two systems, one owned and controlled by the government through its military establishment, and one composed by the rest of the population playing a subservient role. This duality has profound implications in any strategic design dealing with Cuba, as it determines who are the winners and the losers of changes in the current conditions under which the embargo is applied. Americans wanting to travel to Cuba as tourists or to do business will suffer, as their choices are reduced by the policy. Yet they face a moral dilemma, since when dealing with Cuba, anything they gain comes at the expense of underpaid Cuban workers, who lack freedom of choice as laborers or investors. The changes may affect Cuba positively if (perhaps a big if) in view of the current crisis of the Cuban economy, its government feels an incentive to somewhat liberalize the country’s fledging private sector by allowing it to do business directly with American enterprises and bypass the military. The obvious reason for Trump’s decision is to fulfill a campaign pledge to Cuban-Americans to reverse some of the Obama’s ‘normalization’ policy announced in 2014. Nevertheless, in all fairness, Trump’s sincerity on wanting to contribute to improving political conditions for Cubans in the island should not be discarded."
Jonathan Benjamin-Alvarado, interim director of the Office of Latino/Latin American Studies and professor of political science at the University of Nebraska Omaha: "The ‘new’ policy will make the already complex business interactions with Cuban enterprises even more frustrating. Even for those businesses grandfathered in the new policy, the depth of scrutiny and auditing required to meet the new policy provisions will severely constrain the potential revenue going to Cuba. None of it does anything to improve human rights. GAESA and the other state-run firms will see a drop in revenue, but there will also be a significant chilling effect across all of the Cuban economy. There are numerous private enterprises that rely on the presence of tourism. Although the state runs the hotels, transportation and supply firms, the vast majority of the beneficiaries are everyday Cubans who work for these enterprises. The Trump administration needed a ‘victory.’ These policy changes were low-hanging fruit and were essentially designed for domestic consumption in a small and shrinking pocket of South Florida. It is political theater that advances nothing other than the narrow perspective of backward-looking constituents. This policy returns us to an obsolete Cold War stance that has not worked and will not work. The policy also feeds Cuban suspicions that this administration cannot be trusted, and it erodes any gains that the Obama initiatives may have generated. It will just make things much more difficult under any scenario. This advances neither human rights nor freedom for the Cuban people, and simultaneously diminishes the capacity of the state and of private enterprises to create economic gains for the entire island."