President Donald Trump visited Miami Friday, where he announced a tightening of the rules on trade and travel enacted under former President Barack Obama.
Potential Business Impact of the Cuba Policies Rollback
Leading up to the announcement, there are at least five key factors the Trump administration should consider before deciding to roll back current U.S. regulations on the island nation.
Reversing Course With Cuba Could Cost The U.S. Jobs And Revenue
Rolling back regulations with Cuba could cost the U.S. 12,295 jobs and businesses and taxpayers over $6 billion over Trump’s first term in office, a June 1 report from Engage Cuba finds. The group did not include U.S. agricultural exports to Cuba in its estimates. Including agricultural exports, the U.S. stands to lose 14,500 jobs and $8.1 billion in revenue.
Even the low end of 12,000 jobs still accounts for more jobs than the president saved with his much lauded victory over Carrier, which is speculated to have saved the U.S. economy between 800 and 1,100 American jobs. The company still plans to ship around 300 positions to Mexico before Christmas.
U.S. Has A Positive Trade Relationship With Cuba
The U.S. has a positive trade relationship with the island nation, meaning that America exports more than it imports from Cuba. In 2016, the U.S. exported over $245 million dollars — measured on a nominal basis — worth of goods and services to Cuba and imported nothing, according to the U.S. Census Bureau on Foreign Trade. In the first four months of 2017, the U.S. has exported over $83 million worth of goods and services to the island.
The President is vitriolic about the U.S. engaging in trade relationships that are not a net-benefit to American businesses and consumers. It appears from the numbers that Cuba presents a positive trade relationship for the U.S. dating back to 1992, according to the U.S. Census Bureau.
Potential National Security Threats To Reversing Course With Cuba
If President Donald Trump chooses to reverse course with Cuba and move back to the isolationist policies imposed on the island nation under former President Dwight Eisenhower, he could effectively be giving a gift to both Russia and China.
Russia and China are already working to improve their political and economic ties to the island some 90 miles off the coast of the U.S. The top export destination for Cuban products is China, which the Massachusetts Institute of Technology estimates at around $308 million a year.
Russia announced in June its plans to invest $2 billion in Cuba to repair its rapidly deteriorating railway system. Russia’s state-owned oil company, Rosneft, announced in early-May its deal with the Cuban government to supply 250,000 tonnes of oil and diesel fuel to the nation, Reuters reports.
Majority Of Republicans Support Obama’s Cuba Policy
The majority of Republican voters approve of former President Barack Obama’s open policy toward Cuba, according to a poll (PDF) released Monday [June 12.]
Sixty-four percent of Republicans and 65 percent of registered voters overall support an open trade policy with the Cuban government. Also, the majority of Cuban Americans living in Miami — the largest hub of Cuban Americans living in the U.S. — support the Obama-era Cuba policies, the Miami Herald reports. Some 54 percent of Cuban Americans in Miami want to end the Cuban embargo.
Trump Could Face Some Heat From Cuba Policy Hawks If He Does Not Reverse Course
If Trump decides to keep up the Obama-era policies towards Cuba, he could face some significant backlash from Republican Rep. Mario Diaz-Balart and Sen. Marco Rubio of Florida.
Diaz-Balart, as The Daily Caller originally reported in May, traded his vote on the American Health Care Act to gain concessions from Trump on his Cuba policy. The representative denies those claims, but remains opposed to loosening trade and travel restrictions on Cuba.
Rubio and other critics of Obama argue that, in lifting the embargo, we have given too much to Cuban President Raul Castro and are receiving far less in return.
“I am confident that President Trump will treat Cuba like the dictatorship it is and that our policy going forward will reflect the fact that it is not in the national interest of the United States for us to be doing business with the Cuban military,” Rubio told el Nuevo Herald.
Former commerce secretary under former President George W. Bush, Carlos Gutierrez, says that “Cubans in Cuba will be terribly disheartened” if Trump decides to reverse course. “This decision will not play well anywhere, except for in those very cloistered spots in South Florida where Sen. Rubio and Mario Diaz-Balart have constituents.”
Updated from Original Article
Republished by permission. Original here.
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This article, “Trump’s Rule Changes on Cuba Cause Worry, Will U.S. Businesses Suffer?” was first published on Small Business Trends