The Trump administration has embarked on what many experts view as the most substantial broadening of U.S. sanctions on Cuba in many years. This initiative is seen as a pivotal step in reshaping the economic interactions between the U.S., Cuba, and international businesses connected to the island.
Supporters of this policy assert that it marks a significant shift, as it targets not only the Cuban government but also extends to foreign companies and banks. These entities are now facing potential sanctions if they continue their involvement with Cuba’s military-dominated business conglomerate.
Under a new executive order signed by President Donald Trump on May 1, the U.S. is implementing a more comprehensive approach that extends beyond American companies for the first time. This strategy puts foreign firms at risk of sanctions if they engage in sectors of the Cuban economy associated with Grupo de Administración Empresarial S.A., or GAESA.
Proponents believe this move effectively closes a loophole that previously allowed foreign investors to support Cuba’s communist regime, while the U.S. embargo imposed strict limitations on American businesses.
However, critics warn that these measures could exacerbate the already dire humanitarian situation on the island without significantly undermining the Cuban government.
Amid these tensions, protesters in Morón, Cuba, have attempted to set fire to the Communist Party headquarters following allegations that authorities opened fire on demonstrators without warning, a scene captured in images obtained by a news agency.
“At the top of the month, what the Trump administration did was for the first time extend the application of U.S. sanctions from just prohibiting trade between U.S. firms and U.S. persons and the Cuban island to third-party countries and enablers,” Max Meizlish, a former Treasury Department official now serving as a research fellow at the Foundation for Defense of Democracies, told News Agency in an interview.
“For the first time ever in a truly unprecedented fashion, that’s the same logic that the administration is now applying to Cuba,” he said.
The sanctions focus heavily on GAESA, a sprawling military-linked conglomerate that analysts estimate controls between 40% and 70% of Cuba’s economy, including tourism, mining, retail, ports and financial services.
A recent Foundation for Defense of Democracies report authored by Meizlish and Connor Pfeiffer argued that foreign companies doing business in Cuba are effectively helping sustain the regime’s military and political leadership.
An image of Fidel and Raul Castro and Miguel Diaz-Canel, Cuba’s president and first secretary of the Communist Party, is displayed in a billboard in Havana, April 12, 2023. (Alexandre Meneghini/Reuters)
The State Department sanctioned GAESA and several affiliated entities in May under the new authorities, opening the door for potential penalties against foreign companies and financial institutions that continue dealings with them after a June 5 wind-down deadline.
Meizlish argued previous sanctions regimes failed because they isolated American companies while allowing foreign actors to continue financing the Cuban state.
“There’s a lot of Spanish firms, for instance, that have invested millions of dollars in luxury hotel properties, villa properties in Cuba that partner with GAESA, all funding this military enterprise at the expense of the Cuban people,” he said.
He also pointed to Canadian involvement in Cuba’s nickel and cobalt sectors, saying foreign investment has generated “huge amounts of money for the regime.”
“A lot of people think about the U.S. embargo over the years is actually being responsible for a lot of the problems on the Cuban island, but they don’t give consideration to the fact that GAESA, this newly sanctioned entity, has been sitting on an estimated $20 billion in assets and cash over the year while depriving the people of Cuba,” Meizlish told News Agency.
But critics of the policy warn the economic fallout could land the hardest on ordinary Cubans.
William LeoGrande, a longtime Cuba expert at American University, said the May 1 measures represent a major escalation because they specifically target foreign businesses rather than just Americans and aim to deter foreign companies from doing business with GAESA by threatening sanctions exposure.
LeoGrande acknowledged the measures could deprive the Cuban government of revenue but argued the broader population is likely to suffer most.
A woman with her son signals a car on a dark street during a blackout in Bauta municipality, Artemisa province, Cuba, on March 18, 2024. (Yamil Lage/AFP via Getty Images)
“This would potentially deprive the Cuban government of funds, but the impact will fall mainly on ordinary citizens because it means the government has fewer resources to import food, medicine and fuel,” he said.
The debate comes as Cuba faces its deepest economic and humanitarian crisis in years.
The World Food Programme says food insecurity is worsening amid fuel shortages, inflation and declining access to imported goods, while U.N. officials have warned that electricity shortages and blackouts are disrupting hospitals, vaccination programs and food distribution networks across the island.
LeoGrande also warned tougher sanctions could contribute to another migration crisis.
Protesters take to the streets in Cuba over food and electricity shortages. (Reuters)
“Another unintended effect is that by making living conditions in Cuba even more desperate, tougher sanctions could trigger a mass migration like we saw in 1980 or 1994,” LeoGrande said.
On background, a U.S. official rejected arguments that American sanctions are responsible for Cuba’s humanitarian crisis.
“The suffering of the Cuban people is not caused by the U.S. embargo but by the Cuban dictatorship’s failed Communist policies and human rights violations,” the official told News Agency. “The embargo does not prohibit Cuba’s access to world markets or trade with third countries.”
The official added that U.S. law explicitly permits exports of food, medicine and medical equipment to Cuba and accused the regime of hiding “billions in overseas bank accounts instead of investing in electricity, infrastructure and the daily needs of its people.”
The debate mirrors long-standing arguments surrounding U.S. sanctions on countries like Iran and Venezuela, where supporters view economic pressure as a tool to weaken authoritarian governments while critics argue regimes often survive and civilians absorb the economic damage.
Meizlish argued sanctions should not be judged simply by whether they immediately topple governments.
“The problem isn’t that the embargo went too far,” he said. “It’s that it didn’t go far enough.”
News Agency reached out to the Cuban Embassy in Washington for comment but did not receive a response by the time of publication.
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