The United States, the Trump administration, and its economic war against Cuba
Dr. Raúl Rodríguez Rodríguez*
Within the Collection of “Notebooks of Latin American Critical Thought”, CLACSO presents the research "The United States, the Trump administration and its economic war against Cuba” from Dr. Raúl Rodríguez Rodríguez, member of the CLACSO Working Group “Studies on the United States”.
For six decades, US policy toward Cuba has been based, but not exclusively, on the implementation of unilateral coercive economic measures. The use of this instrument began very early on, once the new Cuban government, the result of a genuine social revolution, undertook a series of structural transformations that limited the process of capitalist accumulation with the aim of abandoning the dominant political and economic pattern in Cuba and the hemisphere and breaking the relationship of economic dependence and political subordination with the United States that had been essentially established since the beginning of the 20th century with the advent of the Republic of 1902 in Cuba.
As early as July 1960, the Eisenhower administration eliminated Cuba's sugar quota in the US market.[1]It is not difficult to understand the economic impact that such a measure, affecting a major export sector, would have on a small, underdeveloped, and dependent island nation in an asymmetrical relationship with a major power.
Although the underlying principles have varied somewhat over time, the constant objective has been to use U.S. economic power to undermine Cuba’s socioeconomic and political system and bring about regime change. The frequently cited April 1960 State Department Memorandum made this explicit: “The only foreseeable means of alienating domestic support is through disenchantment and disaffection based on economic dissatisfaction and hardship… If the foregoing is accepted or cannot be successfully countered, it follows that it is possible, then steps should be taken rapidly to weaken the economic life of Cuba.”[2]".
The more comprehensive use of economic sanctions as a policy instrument toward Cuba began later, in October 1960, when the Eisenhower administration invoked the Trading with the Enemy Act of 1917, in its sections 5 and 16.[3]to prohibit all exports to Cuba, except for medical supplies and food. The following year, in 1961, the United States Congress passed the Foreign Aid Act,[4] which prohibited aid to states considered communist, this decision marks an ideological turning point in the United States' treatment of Cuba, by definitively framing the policy towards Cuba within the East-West conflict.
In February 1962, President Kennedy, through Presidential Proclamation 3447[5]The sanctions were increased by prohibiting the importation of “all goods of Cuban origin and goods imported from or through Cuba.” In 1963, the Treasury Department issued the Cuban Assets Control Regulations (CACR), which remain the core of the embargo regulations to this day, although they have been amended many times over the years to reflect strategic policy adjustments by different U.S. administrations. Furthermore, since Cuba is subject to a “trade embargo,” all exports to Cuba must be authorized by the Department of Commerce, as implemented through the Export Administration Regulations (EAR). In short, all these measures provided the original framework for the embargo.
However, this confrontation on the economic front was not limited to overt or “public” actions. In fact, the use of sanctions as a policy of economic pressure could only succeed, as U.S. officials insisted as early as 1963, if accompanied by a sustained program of sabotage against key sectors of the Cuban economy. “To achieve maximum impact on the Cuban economy,” the Central Intelligence Agency stated in a 1963 report, “[sanctions] must be coordinated with sabotage operations.”[6].
In the decades that followed, the United States expanded and strengthened the sanctions regime against Cuba, transforming it into a more comprehensive and far-reaching set of unilateral economic sanctions. In the 1990s, the sanctions became even more extraterritorial as the U.S. government sought to limit Cuba's efforts to diversify its international economic relations after the collapse of the Soviet Union, the island's main trading partner. Two laws were passed during the 1990s: the Torricelli Act of 1992, sponsored by Senator Robert Torricelli (D-N.J.), and the Helms-Burton Act of 1996, named after Republicans Dan Burton (R-IN) and Jesse Helms (R-NC). The former prohibited trade with Cuba by subsidiaries of U.S. companies in third countries, a restriction that President Gerald Ford had lifted in 1975 and which amounted to $718 million in 1991.
Furthermore, with the obvious aim of accelerating regime change in Cuba at a time of economic hardship for the country, the new legislation, known as the Cuban Democracy Act (CDA) in 1992, explicitly stated the objective of “seeking a peaceful transition to democracy in Cuba.” through the application of economic sanctions with a broader extraterritorial reach." With this law The ban on trade with Cuba by subsidiaries of U.S. companies based in third countries was reinstated. This legislation essentially strengthened U.S. sanctions against Cuba by increasing restrictions on humanitarian aid, specifically food, medicine, and medical supplies; by denying entry to the United States to any vessel that had docked in a Cuban port in the previous 180 days; and by authorizing the use of sanctions against third states that provided aid to Cuba. Torricelli himself stated that his intention was “to wreak havoc on that island.”
The Helms-Burton Act of 1996 codified the regulations of the embargo, executive orders, and legislation already in effect. Previously, these regulations could be revised by executive order; now, they can only be changed by an act of Congress. This law, still in force, seeks not only to affect the Cuban economy but also to hinder the Cuban government's efforts to reintegrate itself into the global economy within the new international context and the new order of international relations that emerged after the fall of the Soviet Union and the states of the Eastern European Socialist bloc. Its provisions are designed to perpetuate the policy over time, regardless of whether the administration is Democratic or Republican, and to create a favorable framework for capitalist restoration under the tutelage of the United States and the remnants of the pre-1959 ruling classes in Cuba.
In 2000, new legislation, the Trade Sanctions Reform and Export Enhancement Act (TSRA), was added. In principle, TSRA provides for humanitarian exemptions, such as for food. However, even food sales were only permitted on adverse and costly terms for Cuba due to other provisions and financial sanctions, such as the prohibition on the use of US dollars and the requirement of prepayment without the participation of US banks in these transactions.
The system of economic sanctions that began in the early 1960s has become a comprehensive blockade against the island nation.[7]The U.S. system of economic sanctions against Cuba currently employs all the main methods available to a sanctioning state: trade control, suspension of aid and technical assistance, freezing of the target's financial assets, and blacklisting of foreign companies involved in trade with Cuba.[8]In fact, in 2007, the U.S. Government Accountability Office described what the U.S. government calls the embargo as the most comprehensive set of sanctions the United States has ever imposed on any country, and the longest-lasting, most sweeping, and unilateral sanctions in contemporary history that remain in effect.[9].
What has been the impact of this decades-long approach? A comprehensive assessment of the impacts of economic warfare against Cuba is beyond the scope of this brief summary of various aspects of the issue. However, simply reviewing some of the reports submitted annually by Cuba to the United Nations General Assembly, which this forum approves by an overwhelming majority, provides a considerable source of information on the matter.[10].
Other more specific sources, such as a report commissioned by the UN Human Rights Commission in 2000, noted that "health and nutrition have been two of the main victims of the sanctions," citing the highly critical report by the American Association for Global Health, which confirms that the embargo caused "malnutrition, poor water quality, and denial of access to medical equipment and drugs" and amounted to "the deliberate blocking of the Cuban population's access to food and medicine."[11].
Economic sanctions within the framework of the limited process towards standardization
On December 17, 2014, the presidents of Cuba and the United States announced the start of a process to normalize their bilateral relations, an unprecedented and, in many respects, very important action. From that date onward, significant progress was made on the political and diplomatic fronts, along with some agreements that had a certain economic impact on Cuba. Although the Obama administration eased some sanctions as a result of the negotiation process that began after the December 2014 announcements, these measures were limited, mainly related to travel to Cuba by U.S. citizens and cultural exchanges. It is worth noting in this regard that there is a legal provision prohibiting Americans from traveling to Cuba as tourists, which was imposed by the Ronald Reagan administration in 1982.
None of the regulatory changes made through executive action by the Obama administration substantially altered the complicated web of provisions, regulations, and laws that govern the application of the blockade established by federal legislation since 1996 with the approval of the Helms-Burton Act.
Trump and the use of economic sanctions as a foreign policy instrument
The use of economic sanctions is not new in international relations; examples of such actions can be found dating back to antiquity.[12]At the end of World War I, economic sanctions emerged as a significant alternative for advancing the so-called Wilsonian liberal order. It was precisely US President Woodrow Wilson, one of the architects of the League of Nations, who described the use of sanctions, which he called a boycott, as follows: “By applying an economic remedy, deadly, silent, and peaceful, there will be no need to use force.” According to Wilson, through a boycott, a supranational and multilateral organization could promote collective security and act as the policeman of international society. In this context, the boycott appears as a more humane alternative to war.
After World War II, economic sanctions were incorporated into the Charter of the United Nations as a tool for the Security Council. Through this multilateral mechanism, coalitions of nations have used economic sanctions as an instrument to try to modify the behavior of some states. Article 41 of Chapter VII of the Charter of the United Nations[13] It establishes economic and other non-military measures for the maintenance or restoration of international peace and security, without using the term sanctions to designate them. These measures are mandatory for all Member States; they are listed in relation to the maintenance of peace in Chapter VII of the Charter and have become familiar to a wide public in the wake of the 1991 Gulf War. The use of economic coercion is a step prior to military force as set out in Art. 42; interestingly, the Charter gives the Security Council a monopoly on definitions in this field; the Security Council decides for itself whether it is a threat to the peace, a breach of the peace or an act of aggression.
Although economic sanctions may be multilateral or imposed by a supranational international organization with a mandate to do so, such as the United Nations, in the largest study of sanctions of the last century, Economic Sanctions Reconsidered, Hufbauer, Schott, and Elliot define economic sanctions as a “deliberate, government-inspired withdrawal or threat of withdrawal from traditional trade and financial relations for foreign and security policy purposes or to alter the behavior of a state that does not comply with norms universally recognized by the international community, with the approval of the United Nations Security Council.” Sanctions may be partial, affecting only certain goods or persons; or they may be comprehensive, prohibiting trade with respect to an entire country.[14]
However, some states tend to impose economic sanctions unilaterally, and this has been particularly true in the case of the United States. In their extensive study of more than two hundred sanctions episodes over the past century, Hufbauer, Schott, Elliot, and Oegg concluded that the United States had used economic coercion far more than any other country in the international system.
In 2017, Donald Trump arrived at the White House, already in the fourth year of his presidency. Richard Nephew, a proponent of the use of economic sanctions and author of The Art of Sanctions[15]He tried to explain to the Washington Post[16] The administration's strong inclination to use America's economic power as its preferred instrument for achieving foreign policy objectives is, according to Nephew, a threefold reason. First, Trump, a former businessman, "sees money as a universal source of value" and appreciates that the direct ramifications of sanctions are financial. Second, sanctions appeal to Trump's general aversion—with some notable exceptions—to the involvement of American troops in direct military action, allowing him to impose his will with what he considers minimal American risk or investment. And third, sanctions satisfy his "do something" impulse, especially when it comes to foreign policy problems he deems intractable.
Although the use of sanctions has steadily increased each year since the September 11 terrorist attacks, partly as a means to disrupt and penalize terrorist organizations and nations that oppose US hegemonic designs, the Trump administration has significantly expanded its use of sanctions and designations since taking office. In the Western Hemisphere, the most notable examples are the policy of unilateral coercive economic sanctions against the Bolivarian Revolution in Venezuela and the Cuban Revolution.
Trump's economic war against Cuba: Characteristics and evolution reciente
On November 29, 2016, President-elect Trump used his favorite social media platform to threaten to reverse the normalization efforts undertaken by the Obama administration. Then, in June 2017, he appeared at the Manuel Artime Theater in Miami; surrounded by the most conservative elements of the Cuban-American community in South Florida, he signed the Presidential Memorandum on National Security.[17] Regarding the strengthening of U.S. policy toward Cuba, this was the first formal executive action aimed at reversing Obama-era measures. The core of the memorandum identifies economic sanctions as the preferred tool for dealing with Cuba, limiting economic interaction with the country, enforcing the travel ban, and formally asserting opposition to calls from international forums to lift the economic embargo against Cuba.
Donald Trump has not only largely reversed the modest changes made to the framework of economic sanctions by the Barack Obama administration, but has also taken the sanctions program to new extremes with the use of instruments not previously applied that are qualitatively superior and an exponential increase over the time his administration has lasted, especially during 2019.
The escalation of sanctions began in November 2017, when the U.S. State Department published a list of 180 entities and establishments that Americans, who through licenses can travel to Cuba, could no longer frequent, arguing that they help finance the Cuban military and its intelligence and security services; these include hotels, shops, rum manufacturing facilities, marinas, and the economic development zone in the Port of Mariel.
That list has been updated 6 times in 2019 and currently includes 223 entities, including ministries of the Republic of Cuba[18]The Treasury Department also issued its own set of restrictions on travel to Cuba for educational or cultural exchange groups for U.S. citizens. The latest changes related to travel to Cuba included the complete elimination of licenses for "person-to-person" educational travel, effectively preventing Americans from visiting the country independently for educational purposes if their trip did not lead to an academic degree. From then on, Americans could only travel with organized groups under the auspices of a licensed U.S.-based travel provider. While there are still legal ways for U.S. citizens to travel to Cuba, these are far more strictly restricted than they were before Trump took office.
During 2019, the increased use of sanctions was more qualitative and sustained over time. On March 4, Secretary of State Pompeo announced, twenty-three years after the passage of the 1996 Helms-Burton Act, which codified mechanisms for enforcing sanctions and the embargo, that the United States would activate the clause of the law known as Title III. This section of the law allows individuals, both U.S. citizens and Cuban-born U.S. citizens, to file lawsuits against foreign companies doing business in the Republic of Cuba and using properties nationalized after the 1959 revolution.
In June 2019, the Trump administration further curtailed travel to Cuba by banning group travel on cruise ships, yachts, and corporate jets. More than 638,000 non-Cuban Americans visited Cuba in 2018, but that number has declined significantly. Analysts agree that owners of small Cuban businesses, such as restaurants and guesthouses, who benefited from increased business from American visitors, are feeling the impact of the reduced number of visitors from the United States. The impact has been even greater on the Cuban private sector because, according to U.S. Treasury Department regulations, American travelers were more likely to stay in private guesthouses and hire private drivers and tour guides.
Travel restrictions have also taken a humanitarian toll. After a tornado killed six people, injured many others, and damaged or destroyed homes in January 2019, Cubans living in Japan organized a relief effort, raising money and collecting clothing and shoes for donation. The Japanese NGO Peace Boat loaded these items onto the Ocean Dream, a ship owned by the Miami-based shipping company Seahawk Corp. But due to new travel restrictions, the aid could not be delivered, and the Ocean Dream, laden with donations, was forced to return to Japan.
The economic measures imposed in September 2019 are perhaps the ones that most directly affect a segment of the Cuban population. Under the Obama administration, people living in the United States could send unlimited remittances to family members in Cuba. Now, that amount has been reduced to a maximum of $1,000 per quarter. Under the Obama administration, Cubans in the United States could also send money to Cubans who were not family members, as well as to charitable organizations; currently, this is not permitted by the U.S. government. This will have a human cost: approximately 1 million of the more than 2 million Cubans living abroad, most of them in the United States, send remittances to their families. Family support in the form of remittances and consumer goods currently reaches a significant number of Cubans living on the island.
Towards the end of 2019, at the request of the State Department, the Department of Transportation suspended all commercial flights to Cuban cities other than Havana starting on December 10th, and this suspension was subsequently extended to charter flights on January 10th, 2020. These actions mainly affect family travel, which is also impacted by the closure of the United States consulate in Havana as a result of still unexplained health incidents among US embassy staff in Havana that supposedly began when President Obama was leaving office, but were made public in August 2018.
The U.S. Treasury Department has further restricted Cuba's access to the U.S. financial system by eliminating authorization for what are commonly known as "U-turn" transactions. These are transfers of funds that originate and terminate outside the U.S., where neither the sender nor the recipient is subject to U.S. jurisdiction. This is having a considerable impact on how Cuban entities, whether private or state-owned, conduct business with trading partners in Canada, Europe, Asia, and Latin America.
During 2019, the Trump administration adopted some of the most significant qualitative changes in the application of the provisions of the embargo against Cuba. The administration initiated actions to disrupt oil shipments to and from Cuba, while also imposing sanctions on companies in third countries that do business with Cuba. Such was the case with the Italian-based tanker company PB Tankers SPA. The Treasury Department specifically cited six of the company's tankers for having transported oil from Venezuela, including one tanker that delivered petroleum products from Venezuela to Cuba. (One particular aspect of this action stands out: the attempt to disrupt Cuba's oil supply along with the interest in harming Cuba's main ally in the region, Venezuela.) Subsequently, PB Tankers suspended shipments to Cuba. Shortly thereafter, the Treasury Department lifted the sanctions on the company's fleet, "commending the Italian company for halting deliveries of Venezuelan oil to the island nation."[19].
The action taken against PB Tankers goes far beyond restricting trade by U.S. persons; it goes beyond punishing Cuba’s military and intelligence services, the stated targets of the sanctions. Pressure on foreign shipping companies restricts oil imports, which in turn reduces the fuel available for transportation, electricity, and other vital services. And it is one of the clearest examples of how the extraterritorial reach of U.S. sanctions is, in fact, intended to impose hardship on the Cuban people—an objective first articulated in the State Department’s 1960 Mallory Memorandum, and now pursued with unprecedented and unadorned zeal some sixty years later.
The measures imposed by the Trump administration are clearly aimed at bankrupting the Cuban state. They target the country's economic strengths, such as the tourism sector and the export of professional services, and exploit its vulnerabilities, such as energy dependence and the need to attract foreign direct investment.
* Full Professor and Director of the Center for Hemispheric and United States Studies (CEHSEU) at the University of Havana. Member of the CLACSO Working Group – Studies on the United States.
[1] Statement by the President upon Signing Bill and Proclamation Relating to the Cuban Sugar Quota, https://www.presidency.ucsb.edu/documents/statement-the-president-upon-signing-bill-and-proclamation-relating-the-cuban-sugar-quota
[2] Inauguration by the US Government of a Policy to Weaken the Cuban Economy", Memorandum from the Deputy Assistant Secretary of State for Inter-American Affairs (Mallory) to the Assistant Secretary of State for Inter-American Affairs (Rubottom), Washington, April 6th, 1960, Department of State, Central files, 737.00/4-660. Secret Drafted by Mallory, FRUS 1958-60
[3] https://www.treasury.gov/resource-center/sanctions/Documents/twea.pdf
[4]https://legcounsel.house.gov/Comps/Foreign%20Assistance%20Act%20Of%201961.pdf
[5] https://www.govinfo.gov/content/pkg/STATUTE-76/pdf/STATUTE-76-Pg1446.pdf
[6]Paper prepared by the central intelligence agency for the standing group of the National Security Council, Washington, June 8 1963. Foreign Relations of the United States, 1961–1963, volume xi, Cuban missile crisis and aftermath, Document 346, https://history.state.gov/historicaldocuments/frus1961-63v11/d346
[7] Morley, Morris H.: “The United States and the Global Economic Blockade of Cuba: A Study in Political Pressures on America Allies”, Canadian Journal of Political Science, Vol. 17, No.1. ) Mar., 1984), pp. 25-48.
[8] Margaret P. Doxey, Economic Sanctions and International Enforcement, 2nd ed. (New York: Oxford University Press, 1980), pp. 14-15.
[9]United States Government Accountability Office, (GAO) Economic Sanctions, Agencies Face Competing Priorities in Enforcing the US Embargo on Cuba, November 2007.
[10] Cuba Report “Necessity to end the economic, commercial and financial blockade imposed by the United States of America against Cuba” http://misiones.minrex.gob.cu/es/articulo/informe-de-cuba-necesidad-de-poner-fin-al-bloqueo-economico-comercial-y-financiero-1
[11] Mark Bossyut, Economic and Social Council, COMMISSION ON HUMAN RIGHTS, Sub-Commission on the Promotion and Protection of Human Rights Fifty-second session, Item 12 of the provisional agenda, Review of further developments in fields with which the sub-commission has been or may be concerned, The adverse consequences of economic sanctions on the enjoyment of human rights, E/CN.4/Sub.2/2000/33. June 21
[12]The history of economic sanctions dates back to at least 432 BC, when the Greek statesman and general Pericles issued the so-called "Decree of Megara" shortly before the start of the First Peloponnesian War, which excluded its merchants from trade with Athens. The reason given was that the Megarians had supposedly occupied sacred land for cultivation.[1] Hufbauer, GC, Schott, JJ and Elliot, KA Economic Sanctions Reconsidered: History and Current Policy, 2nd ed., Washington, DC: Institute of International Economics, 1990.
[13]https://www.un.org/es/sections/un-charter/chapter-vii/index.html
[14]Hufbauer, G., Schott, J., Elliott, K., and Oegg, B. Economic Sanctions Reconsidered (3rd edition), Peterson Institute for International Economics, 2007.
[15] Richard Nephew, The Art of Sanctions: A View from the Field, Columbia University Press, New York 2018
[16]https://www.washingtonpost.com/politics/trump-uses-sanctions-as-a-favorite-form-of-retribution–against-friend-and-foe-alike/2020/01/08/0b9ad6ee-317c-11ea-a053-dc6d944ba776_story.html
[17] https://www.federalregister.gov/documents/2017/10/20/2017-22928/strengthening-the-policy-of-the-united-states-toward-cuba
[18]https://www.state.gov/cuba-sanctions/cuba-restricted-list/
[19] Venezuela-related designation and designations removals,office of foreign assets control,specially designated nationals list update,https://www.treasury.gov/resource-center/sanctions/ofac-enforcement/pages/20190703.aspx
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