Recent moves from Donald Trump to undo policy changes in U.S. relations with Cuba have caused U.S. businesses to pull back on excitement over getting involved with the island, according to news from Reuters on Friday (Nov. 10).
Cuba is home to 11 million consumers, with U.S. firms initially excited to land a bit of business on the island. Recent embargo exemptions allowed U.S. airlines to resume flights to Cuba, while Carnival Cruise Line began to include Cuba in its cruise itineraries and Marriott International subsidiary Starwood Hotels took over management of a Cuban hotel, according to reports.
But in June, the Trump administration tightened trade and travel restrictions. The new rules, which were announced last week, mean companies cannot do business with the military, which controls much of the Cuban economy.
The publication covered Cuba’s trade fair, in which just 13 U.S. businesses participated — compared to 33 U.S. firms in 2016, reports said. That compares to 150 Spanish businesses that participated this year.
According to one U.S. executive, Jay Brickman, vice president of shipping firm Crowley Maritime Corp., the trade fair was “deserted.”
“People have really gotten discouraged and feel they maybe should be investing their time someplace else,” he told Reuters.
According to U.S. Secretary of Commerce Carlos Gutierrez, who is current head of the U.S.-Cuba Business Council, “this is a huge step backwards.”
Reports also noted that U.S. agriculture businesses had hoped an eased relationship with Cuba under Obama would have enabled them to access credits to begin exporting to Cuba, but reversals of that détente have dashed farmers’ hopes.
But businesses’ declining hopes for Cuba can’t all be attributed to policy shifts since Trump took office. According to reports, the island is also struggling with a shortage of physical currency, labor restrictions and a struggling telecommunications industry. Reuters cited interest by PayPal last year to launch its Xoom peer-to-peer (P2P) payments service on the island, but the company ultimately stepped back from those plans because of logistical challenges plaguing the Cuban market.
Still, other companies, including equipment manufacturer Caterpillar, have begun to operate in Cuba, launching a distribution center in the country after it secured the required permits under the Obama administration. Donald Trump’s decision to pull back on the détente, though, means Caterpillar will no longer be able to deal with Cuba’s Mariel special development zone, however.