The economic thaw between the US and Cuba in recent years could be reversed when Donald Trump takes office, despite the death on Friday of the island’s former ruler, Fidel Castro.
Since 2014, Barack Obama has re-established diplomatic relations between the two countries and US companies have benefited from the easing of economic sanctions imposed on Cuba. Airlines offer direct flights to Havana from US cities, Airbnb does business there, telecom companies have roaming coverage, Marriott International has a joint venture to manage some Cuban hotels and a Miami cruise-ship line now sails to Havana.
The trend was helped by Raul Castro assuming power in 2006 when his brother fell ill and taking over the presidency two years later. His more pragmatic approach saw several restrictive laws lifted, a more relaxed approach to private enterprise and the commencement of negotiations that led to the resumption of diplomatic relations between Cuba and the US after more than 50 years in December 2014.
Obama, who also liberalised banking links and dropped restrictions on imports of Cuban cigars and rum, planned to go further according to reports. Many other US companies were exploring potential deals in the expectation that broader trade and investment sanctions would eventually be lifted, a step that would require Congress to rewrite laws.
However, US president-elect Trump has indicated that he could reimpose some sanctions and reverse last year’s historic re-opening of the US embassy in Havana after 54 years unless Cuba agrees to major political and economic reforms.
“We’re not going to have a unilateral deal coming from Cuba back to the United States without some changes in their government – [on] repression, open markets, freedom of religion, political prisoners,” Reince Priebus, Trump’s chief of staff, told Fox News at the weekend.
“These things need to change in order to have open and free relationships – and that’s what president-elect Trump believes and that’s where he is going to head.”
Many Republicans in Congress have opposed the détente with Cuba without a full dismantling of the regime and Florida senator Marco Rubio promises that the new administration will reverse much of Obama’s legacy on Cuba. “We want to take a look at all the changes that were made,” he said.
Trump’s own attitude is less clear, as he initially indicated that he supported the easing of sanctions and his business ventures actively explored opportunities for golf courses and other ventures in the late 1990s and again more recently, in apparent defiance of the US economic trade and investment embargo. He later attacked the normalisation of relations as too weak and last week, he named Cuba hard-liner and sanctions advocate Mauricio Claver-Carone to lead his transition team at the Treasury department.
However, a hard line by Trump would probably trigger a backlash from many US companies. It could also lead to a new exodus of boat people from the island, particularly if he tightens the economic screws on Cuba and clamps down on the legal flow of immigrants to the United States, says Julia Sagebien, associate business professor at Dalhousie University and Cuban economic reforms expert.
“Keeping Cuba afloat is in the national interest of the United States,” she notes.
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