Trump Rolls Back Obama-led Cuba Opening With Limits on New Deals

  • Restrictions could reduce demand for air travel, sea cruises
  • Criticized by business lobby group U.S. Chamber of Commerce

Trump Revises U.S. Policy Toward Cuba

President Donald Trump announced new restrictions Friday limiting U.S. citizens’ ability to travel to and do business in Cuba, moving to roll back his predecessor’s historic rapprochement and drawing a rare rebuke from the nation’s largest business lobbying group.

The changes Trump announced include a ban on Americans doing business with the military and intelligence-affiliated companies that control large swaths of the Cuban economy. He unveiled the new policy during a speech in Miami, where the fervently anti-Castro expatriate community helped deliver an electoral victory to Trump in the crucial battleground state.

Donald Trump in Miami on June 16.

Photographer: Mandel Ngan/AFP via Getty Images

“I am canceling the last administration’s completely one-sided deal with Cuba,” Trump told a cheering crowd that included veterans of the failed U.S.-backed Bay of Pigs invasion of the island in 1961.

Trump painted his moves as a fulfillment of his campaign promise to reverse the thaw begun under the Obama administration, saying Cuba had failed to make progress improving human rights. The move to end the decades-old U.S. isolation of Cuba “does not help the Cuban people; they only enrich the Cuban regime,” he said. 

Still, many of the changes in U.S. policy made by President Barack Obama will remain in place, including the opening of a U.S. Embassy in Havana and direct travel to the island via cruise ships and airliners.

Rare Rebuke

The action stirred objections from the U.S. Chamber of Commerce, the country’s largest business lobbying organization, which has otherwise backed much of Trump’s agenda.

“Unfortunately, today’s moves actually limit the possibility for positive change on the island and risk ceding growth opportunities to other countries that, frankly, may not share America’s interest in a free and democratic Cuba that respects human rights,” Myron Brilliant, the chamber’s executive vice president and head of international affairs, said in a statement emailed to reporters.

Machinery manufacturer Caterpillar Inc., whose then-CEO Doug Oberhelman traveled to Cuba last year to lay groundwork for sales in the country, also signaled displeasure with Trump’s action.

“Caterpillar believes that engagement with Cuba continues to represent a strong opportunity - not just for American businesses, but to serve as a powerful tool for change,” the company said in a statement emailed to reporters that avoided direct criticism of the president.

Cuba Critics

Trump was joined on the trip by vocal critics of Obama’s attempt to resume more normal relations with the communist nation. Senator Marco Rubio, the Cuban-American Republican who represents Florida, traveled on Air Force One to the event with Trump, alongside Representative Mario Diaz-Balart, a Florida Republican who is the son of Cuban refugees. Trump tweeted a picture of the two lawmakers working to develop the new Cuba policy, part of what the White House said was extensive consultations with Capitol Hill.

Still, the president’s moves are not designed to massively disrupt existing commercial ties that have grown between the U.S. and Cuba since the Obama administration moved to restore diplomatic ties in late 2014. After his remarks, Trump signed an order directing the Treasury Department to make the changes.

The new rules restricting financial dealings with Cuban companies with links to the country’s military and intelligence services could stall future American development on the island. Grupo de Administracion Empresarial SA, known as GAESA, a state-run, military-affiliated conglomerate, owns almost all of the retail chains in Cuba and 57 of the mainly foreign-run hotels on the island. As part of Trump’s move, the U.S. State Department will create a list of Cuban entities with military ties so U.S. travelers know the establishments they are now expected to avoid.

Ports exempted

Airports and seaports are exempted from the ban, meaning cruise ship companies and airlines can continue to operate their routes to Cuba. Even so, demand for flights and cruises could be depressed as the new limits complicate travel to Cuba.

Several companies engaged in business in Cuba expressed relief that Trump didn’t take more drastic action.

“We are very pleased to learn the news that cruises to Cuba will continue,” Norwegian Cruise Line Holdings Ltd. said in a statement, noting that 70,000 travelers have booked cruises with its lines to Cuba. “We were very concerned about any potential changes, given how popular Cuba itineraries have proven to be with our guests, and we view this as a win for the cruise industry, our valued guests and travel partners.”

Carnival Corp. also said it was “pleased” the changes will allow its ships to continue to sail to Cuba.

“We will review the extent of the tightening of the travel rules, but our guests have already been traveling under the 12 approved forms of travel” since the cruise line’s first trip there more than a year ago, the company said in a statement.

Trump will also exempt banking transactions and fees, allowing Americans to continue to rent private properties such as those offered through AirBnB.

Rum and Cigars

There’s also no change to the policy allowing U.S. travelers to bring home an unlimited amount of Cuban rum and cigars for personal consumption. The policy also won’t limit remittances to Cuba by Cuban Americans, and expanded telecommunications and internet access programs will also be allowed to continue.

Moreover, none of the changes will go into immediate effect. Trump’s order simply instructs his administration to begin drafting new rules within 30 days, with no set timeline for completion.

The Treasury Department said in a fact sheet it expected to unveil the new regulations “in the coming months.” Travelers who have purchased tickets or made hotel reservations ahead of the president’s announcement on Friday will be allowed to proceed with their trips. Commercial engagements completed ahead of the issuance of the new regulations will be allowed to proceed.

That could provide a reprieve for construction projects already under development in conjunction with GAESA, like Sheraton’s Four Points hotel in Havana.

Stricter Enforcement

Trump also plans stricter enforcement of rules mandating that trips to the island fall within one of 12 categories for legal travel to Cuba, including family visits and educational activities, an administration official said. 

The Obama administration relaxed requirements that educational groups travel with a guide from a U.S. organization sponsoring the trip. But the official, who briefed reporters on condition of anonymity, described individually planned trips to the island as ripe for abuse of the still-existing prohibition on tourism, and said Americans seeking so-called “people-to-people” cultural exchanges would again need to book their travel through groups sanctioned by the Treasury Department’s Office of Foreign Assets Control.

The changes are “modest” Pedro Freyre, chairman of law firm Akerman LLP’s international practice and an adjunct professor at Columbia Law School, said in a phone interview.

“It tacitly accepts that the framework of the relationship with Cuba will be with diplomatic relations, with engagement, with conversations,” he said.

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