Earlier this month, President Trump announced what he cast as a wholesale shift in US-Cuba relations. However, this is not quite the total abandonment of President Obama’s ‘normalisation’ policy, which Trump described as “a completely one sided deal,” rather, it is more of a shift than a switch, targeted at limiting commerce with Grupo de Administración Empresarial, SA (GAESA), the business arm of the Cuban military, as well as adding potential further complications to travellers seeking to move between the two nations.
Previously, President Obama had sought to normalise relations between the two nations, restoring normal diplomatic channels by re-opening embassies and allowing American companies such as Google, Airbnb and Sheraton Hotels to establish themselves on the island. However, this has necessitated a great deal of interaction with GAESA — and this resulted in serious opposition to renewed relations. President Trump slammed the deal for failing to extract any concessions on either human rights or democratic reforms from the Cuban government, while enriching the Castro regime.
However, Trump’s return to oppositional policies may prove to be a misstep. Since the US embargo was imposed in 1962, Fidel and his brother Raul have outlasted 11 US Administrations and Cuba has proved remarkably resistant to economic hardship, weathering the fall of the Soviet Union, its largest trading partner, with surprising fortitude. Yet change may be afoot in Cuba. The Latin nation’s next leader is unlikely to be a Castro, and is likely to continue with Raul’s more reformist attitude, rather than the dogmatic approach taken by his late brother. Now, then, may be the perfect time to help foment change in the country, using the US’ considerable soft power to allow the Cuban people access to a modern market economy, and all the forbidden fruits of capitalism. In 2016, Airbnb alone injected $40 million into the country to Cubans who rented out their homes on the platform, whilst Google is currently improving internet access across the nation. Access to American cash could allow Cuba’s small and dubiously legal (yet surprisingly successful) marketized segment of the economy to prosper even further. By allowing American tourist dollars into the country, Washington may help speed up calls for reform from inside the country as a greater number of people demand access to a sector of the economy that is already far more dynamic than the rest of the Cuban economy. Making it harder for American companies to operate on the island will limit America’s influence on the economy — having a company such as Google providing internet to the otherwise barely-connected people of the island could prove an invaluable hand to play to extract concessions on human rights in the near future.
Improving the access of the Cuban people to the US economy would also give this or any future administration both a larger stick and a tastier carrot when dealing with the socialist government. GEASA and its tourist operations contribute a not insignificant 21% of Cuban hard currency income — a total of 8% of state revenue. Trump’s repositioning is aimed at funnelling American cash into the private sector, rather than into the coffers of the single-party state — yet his travel restrictions in particular will benefit large travel operators, rather than independent casa particular owners, who run bed-and-breakfasts from their own houses, and many of whom have already reported a large number of cancellations since Trump’s rhetoric hardened. Should Trump choose, he could allow the Cuban economy to grow significantly further using American money. With an increased involvement in the economy, the Cuban government would also gradually grow increasingly dependent on this source of income — Trump would then be in a far stronger position to extract concessions at the negotiating table.
But there is more at stake than just allowing entrepreneurial Cubans to run restaurants and private bed-and-breakfasts for Yankee dollars. There is also a demand from Americans to visit the island nation, which could prove a boost for US businesses. Trade exports are projected to rise from $180 million to $2.2 billion. There is the potential for an American-Cuban axis to greatly harm the drug trafficking trade in South and Latin America. There is also a mutual appreciation between citizens of the two ideologically opposed nations. Americans are keen to visit and see the somewhat faded glory of Havana, whilst the Cuban people are known lovers of America — many have relatives in the country, and baseball is somewhat of a Cuban national obsession. Trump’s moves are more likely to bolster relations between the Cuban Government and its people than the people of America and Cuba.
Just as President Reagan relaxed his anti-USSR rhetoric as the modernizer Gorbachev took power, Trump should lay the groundwork to allow another moderniser to take the reins of power after the now 86-year old Raul Castro inevitably lays them down. Under Raul Castro, one third of the Cuban workforce has moved from the public sector into the private sector. These workers are unlikely to put up with the stiff economic constraints of the regime for long. From the deal-oriented business outlook Trump takes, his opposition to Obama’s softening is understandable. From a geopolitical viewpoint, it is not. Chinese involvement in the Cuban economy is increasing, and if Cuba were to end up reliant on the renminbi, rather than the dollar, this would be an even worse deal for America in the long term.