Trump administration's Cuba restrictions seen as drag on its economy

"Foreign investors are going to think twice," one expert said. "And this is fundamental for the Cuban economy."
Image: Some see Russia reestablishing interests in Cuba
Tourists drive a vintage American-made car in Havana in 2017.Alejandro Ernesto / EPA

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By Carmen Sesin and Orlando Matos

MIAMI — ­The Trump administration's new measures against Cuba mark a hard shift right that is likely to hurt the island nation's economy, experts say, as supporters and detractors debate the policies.

The U.S. on Wednesday announced new restrictions that allow American citizens to sue over property confiscated by the Castro government in the 1959 revolution. It will also limit remittances Cuban-Americans send to relatives and aims to restrict non-family travel to the island.

Cuban government officials condemned the measures. Foreign Minister Bruno Rodriguez said on Cuban television, “We watched with indignation the ridiculous spectacle from Miami.”

The measures against Cuba are part of a broader strategy targeting Venezuela and Nicaragua as well, which national security advisor John Bolton has called the “three stooges of socialism.”

“The troika of tyranny — Cuba, Venezuela, and Nicaragua — is beginning to crumble,” Bolton said.

Administration officials have said the economic pressure on Cuba is aimed at forcing it to stop helping its ally, Venezuela.

But with several years of economic stagnation, the measures are likely to hit Cuba hard. The political and economic crisis in Venezuela has led to a drop in assistance and has affected the Cuban government’s ability to find cash to import basic foods like chicken, cooking oil and flour. The result has been shortages and long lines.

The decision to allow U.S. citizens to sue foreign companies and individuals accused of “trafficking” in confiscated properties could further weaken its economy.

The U.S. has dismissed fervent opposition from Europe and Canada who have lobbied against the enactment of Title III of the Libertad Act, also known as the Helms-Burton law.

It’s a sharp departure from the policy of previous presidents who have suspended the law in six month increments since it was passed in 1996.

“Title III is a serious problem for Cuba,” said Carmelo Mesa-Lago, a professor emeritus of economics at the University of Pittsburgh and a leading expert on the Cuban economy. “Foreign investors are going to think twice about Cuba. And this is fundamental for the Cuban economy.”

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Non-family travel to Cuba will be further restricted, after President Barack Obama loosened restrictions that led to an increase in Americans visiting the island for cultural and educational exchanges. Bolton called these trips “veiled tourism.”

Details on travel limitations have not been announced. Tom Popper, president of InsightCuba, a U.S.-based provider of “people-to-people” travel is optimistic. “We have weathered this storm so many times,” Popper told NBC News. He said his company has survived changes in travel made by three presidents in the past 20 years.

When Trump announced in June 2017 there would be changes to the travel restrictions, the new regulations were not disclosed until November and amounted to minor revisions. “It really didn’t impact travel as a whole for Americans,” Popper said.

The cap in the amount of money that Cuban-Americans send to their relatives on the island is not likely to affect the average Cuban, who generally receives around $200 a month.

But Mesa-Lago warned it would affect entrepreneurs. “Many of them open businesses with money sent by relatives in the U.S.,” he said.

Hold Cuba accountable, or more of the same?

Supporters of the administration's hard-line policies toward Cuba stress the measures are being taken to hold them accountable for their support of the government of Venezuelan President Nicolás Maduro.

But critics say their ultimate goal is to bring down the Cuban government. They say this is more of the same policy that has been directed toward Cuba over the past 60 years and that has failed to bring any change.

“I don’t know of any economic embargo that has brought down a totalitarian regime,” said Andy Gomez, a former dean at the University of Miami and expert on Cuba.

Gomez thinks the administration was previously cautious about fully implementing the Helms-Burton law because the Cuban-American community in Miami has changed drastically, with the majority having arrived after 1990.

“That is important because those are the ones that have family and friends on the island, travel there often, and financially support them on a regular basis,” said Gomez.

Cuban-Americans in Miami are evenly split about their views on the U.S. embargo and this could have an impact in the 2020 elections.

But proponents of the law say it is not the same because the Helms-Burton law has never been fully implemented.

“If this is the first step in fully enforcing the U.S. law, then it was long overdue,” said Jason Poblete, a Washington lawyer who has been advising policymakers for years to enact full implementation.

“Travel is to Cuba what oil is to Iran: regime-preserving revenue,” he said.

Supporters of the measures also say they are being proposed at a crucial time: Venezuela’s financial support is dwindling, no Castros are presidents of Cuba, and Cubans are increasingly connecting to the internet and more emboldened to criticize the government.

But Cubans who have benefited from increased travel and relations with the U.S. do not welcome the changes.

Niuris Higueras, 44, is the co-owner of Atelier, a restaurant frequented by Americans and diplomats in the Vedado neighborhood of Havana. She said she does not receive remittances but feels “disturbed” and “insulted” by the new measures. She fears less travel by Americans will affect her restaurant as well as other private businesses that she depends on.

“How are we going to get out of this?” she asked. “For four years the private sector grew tremendously, and now we’re simply going backwards.”

Carmen Sesin reported from Miami and Orlando Matos reported from Havana.

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