Trump’s Cuba Policy: Three Predictions

Since President Trump’s inauguration, the Cuban and Cuban-American communities have eagerly awaited the president’s actions on Cuba, which the White House has signaled would result from the review of current U.S. policy. It appears that this Friday, Cuba-watchers will have their answers, as President Trump plans to unveil the results of his administration’s Cuba policy review in Miami. Rumors of the president’s potential approach have oscillated from a full reversion of Barack Obama’s Cuba engagement policies to middle-of-the-road deals made with legislators in exchange for concessions in other policy areas.

But given the significant strides made by U.S. companies, travelers and the two governments – not to mention vehement disagreement from many Republicans members of Congress and the American people – it is unlikely that President Trump’s Cuba policy will significantly change the policies that President Obama pursued with Cuba. Here are three things to look for on Friday to that end.

  1. Business engagement won’t change significantly. Despite closed-door meetings with Cuban-American legislators, the appointments of various Cuba hawks to transition team positions as well as the numerous tweets from the president focused on Cuba’s infractions, Trump’s actions are unlikely to be very negative for supporters of engagement – in particular, the business community. In the past two years, U.S. companies have seen major business deals in Cuba, which have included companies in the sharing economy, cruise lines the technology sector and others. It was been estimated that reverting business engagement will cost the United States an estimated $6.6 billion and will eliminate up to 12,000 American jobs; simply put, little is to be gained by tightening restrictions for American businesses, but there’s plenty to lose when it comes to American jobs and companies.Major restrictions jeopardize the many existing Cuba-related business deals and transactions, harming not only the travel and tourism sectors, but also high-return industries, such as the medical device market. Not only does this appear inconsistent with Trump’s overall pro-business approach to governing, but it also hobbles an otherwise easy win for American workers and businesses.

    It has been speculated that President Trump will restrict U.S. business deals with the Cuban Ministry of Defense, which controls approximately 60 percent of the Cuban economy through ownership of its industries, including tourism. But only a small handful of American companies currently do this, and the dirty little secret is that there are ways to engage in business with Cuba without going through the Ministry of Defense. President Trump instinctively and opportunistically understands the potential for Cuba to develop its tourism and construction sectors and the corresponding benefits for the United States. His approach could involve peripheral changes to the policy that appease more conservative Cuban-Americans while still preserving American industry’s capacity to do business.

  2. American travel will likely continue unrestricted. When President Obama took executive action calling for 12 categories of official travel to Cuba, he opened floodgates that led to American travel to the island increasing more than 100 fold. The flooding of Americans to Cuba also brought about first-ever American mobile service operations on the island, as well as frequent U.S. commercial flights and the rebirth of Cuban entrepreneurialism via opportunities in the new shared economy and other vehicles. Before President Obama’s travel changes, the strictest travel policies were put in place by President George W. Bush, who called for very limited travel to the island even by Cuban Americans with family in the country. President Trump is highly unlikely to eliminate the 12 categories of travel to the island or revert to Bush-era travel restrictions. As a free market capitalist who is married to an immigrant from a formerly communist nation, the president is no stranger to the importance of travel in support of developing economies, and as a form of spreading free market practices. He has also been encouraged by many Republicans in the Congress not to limit travel by Americans to Cuba.With the president using this Miami trip to announce his administration’s changes to U.S.-Cuba policy, he is undoubtedly thinking about the Cuban-American audience in Florida, some of whom supported him in the November election. True to his form, President Trump will want to reward that base, and add to its numbers by at least appearing to be tough on the Cuban government. To appease conservative Cuban-American legislators and the conservative voting bloc in Miami, the president may raise the issue of property claims of displaced Cuban-Americans. But, since most Americans disagree with the embargo, President Trump has little reputational incentive to gain by reinstituting major restrictions. It’s just not what the American public wants.
  3. Trump will leave the door open with the Cuban government. Unlike anti-engagement presidents before him, President Trump is unlikely to use his platform on Friday to insult the Cuban government. His relative disinterest in the topics of human rights, political imprisonment and other areas of concern to past administrations would block him from gaining any ground with the Cubans in the future.Further, the United States would be remiss to ignore the power transition that will take place in Cuba at the beginning of next year. With Fidel Castro gone, his 85-year old brother, Raul, is expected to step aside in 2018, making room for Miguel Diaz-Canel to assume power. This presents Trump with the historic opportunity to be the first president to negotiate with a new Cuban leadership. Antagonistic decisions made in the final months of the current regime risk limiting potential positive outcomes in a post-Castro Cuba.

    Until we know more about how the upcoming Cuban presidential transition will unfold and what the implications will be for the United States, it’s wise for the president to heed the counsel of the agency officials who have expressed support for keeping the current policies intact. It would behoove the president to seize this burgeoning opportunity to familiarize himself with Diaz-Canel and to try to shape a cooperative relationship before making any sort of bold move.

Fortunately for those who are pro-Cuba engagement, the president’s announcement will be mostly bluster aimed at appeasing conservative Cuban-American legislators, but it is unlikely to meaningfully change President Obama’s Cuba policies.