Companies hoping to preserve Cuba gains await Trump rules
A recent economic impact study by the advocacy group Engage Cuba concluded that a complete rollback of the current policy on Cuba could cost the American economy $6.6 billion and affect 12,295 jobs nationwide during Trump’s first term in office. Of that amount, airlines and cruise lines would lose $3.5 billion with 10,154 jobs impacted. The Washington, D.C.-based nonprofit is seeking an end to the embargo.
After restoring diplomatic relations with Cuba in 2014, Obama signed a series of executive orders that gave U.S. businesses a small beachhead for doing business in Cuba.
Their reversal could have a “significant impact” in South Florida since the region became a “jumping off place to Cuba,” said John Thomas, an associate professor of hospitality law at Florida International University. Business from visitors in transit to and from Cuba could also be at risk if flights and cruises sharply declined or disappeared, Thomas said.
In a blog post Sunday, John Kavulich, president of the U.S.Cuba Trade and Economic Council in New York, said the Trump administration is weighing “ending self-directed travel and returning to group-only travel for educational and people-to-people programs.”
Under Obama’s liberalized rules, Americans are allowed to visit the island without a license and need not travel in organized groups, provided the purpose of their trips falls under one of 12 categories. They include family visits, research or educational activities for “people-to-people” exchanges.
Since the diplomatic rapprochement, many companies used the rules as leeway to set up businesses in Cuba and establish contacts with government agencies.
“Our new relationship with Cuba has led to tangible results for American companies, created U.S. jobs and strengthened Cuba’s growing private sector,” said James Williams, Engage Cuba’s president. “If President Trump rolled back our Cuba policy, he would add job-killing government regulations on U.S. businesses. Reimposing restrictions on traveling to Cuba would force Americans to jump through even more bureaucratic hoops to exercise their right to travel freely.”
For some American interests, the uncertainty has caused them to place future Cuba business plans on hold, said Hector Chichoni, partner at the Duane Morris law firm in Miami.
Chichoni said he is advising clients to tread carefully and ensure they follow existing rules. But he said some are “going for it,” enticed by the prospects for profits in telecommunications, health care and hospitality.
Peter Quinter, a Miami lawyer at GrayRobinson who also counsels clients on Cuba, agreed caution is merited.
“I remain concerned about the enforcement of contracts under Cuban law, but executives and entrepreneurs interested in doing business with the Cuban government already know that doing so is not for the timid,” he said.