President Donald Trump will announce tightened restrictions on traveling to Cuba and doing business with military-linked entities during a Friday speech in Miami, senior White House officials confirmed.
The new restrictions are not a complete reversal of the Obama administration’s Cuba opening, but they target entities White House officials say enrich the Cuban government and military.
Trump will sign a presidential policy directive to ban U.S. business transactions with Cuban companies with military ties. There will be exceptions for airlines and cruise ships paying landing and docking fees to military-run ports. Cuban-Americans will also be able to continue sending money to family and friends because of an exception on military-owned remittance services, according to the Miami Herald. That exception makes it possible for Airbnb to continue paying its 22,000 hosts through the Miami-based VaCuba remittance service, which the home-sharing company uses to get around the ban on most banking transactions.
Trump’s policy directive largely targets the Revolutionary Armed Forces’ GAESA conglomerate, whose holdings include hotels, retail chains, banks and remittance services, gas stations, construction companies, golf courses, tourist bus fleets, importing and exporting companies, and marinas. Experts estimate GAESA to control up to 60 percent of the economy, including the powerful Gaviota tourism group, making it near impossible for any foreign company or visitor in Cuba to completely avoid the conglomerate.
It’s not clear what impact Trump’s announcement will have on U.S. businesses already engaged in deals with GAESA entities. Starwood, a Marriott subsidiary, has managed the Gaviota-owned Four Points by Sheraton since summer 2016. Starwood also signed deals to manage two other Gaviota hotels, but work on those properties been delayed. White House officials said the Treasury and Commerce departments will create regulations to determine Starwood’s future.
“It would be exceedingly disappointing to see the progress that has been made in the last two years halted and reversed by the administration,” Marriott CEO Arne Sorenson wrote in an emailed statement to Reuters.
White House officials also reiterated that tourism to Cuba is illegal, and the government will add enforcement to the 12 authorized categories of travel to Cuba. Officials suggested individual “people-to-people” travel may end and that the administration will instead encourage group trips with scheduled activities to ensure visitors are not “sitting on the beach.”
“I think it’s extremely ironic and counterproductive,” said Ted Henken, a Baruch College professor and author of Entrepreneurial Cuba. “When you go on a tour, those big groups are almost always linked in business with the Cuban government.”
While the increased enforcement measures do not directly impact U.S. commercial airlines and cruises, it may discourage U.S. travelers. That’s bad news for Cuba, which saw a record 4 million tourists in 2016, and is counting on increased U.S. travelers to energize its struggling economy.
“There’s going to be less of them to spend money, less of them to stay in private homes, less of them to eat at private restaurants and less of them to buy private art on the streets.” Henken said.
But Trump’s highly anticipated Cuba policies are expected to leave many Obama-era changes intact. While the U.S. still has no formal ambassador to Cuba, embassies in both Havana and Washington will remain open. Trump will also not reinstate the “wet foot, dry foot” policy that gave Cubans who arrived on U.S. soil a pathway to permanent residency. White House officials also said there will be no changes on rules allowing travelers to bring back Cuban products such as rum and cigars.
Friday’s announcement will partially fulfill a campaign promise Trump made to anti-Castro Cuban-Americans. Even though the president said he was “fine” with the Obama administration’s Cuba opening early in his campaign, he told a Miami crowd in September 2016 he would reverse the opening unless the Castro government gave political and religious freedoms to its citizens. A day after Fidel Castro died, Trump also tweeted a threat to “terminate” the U.S.-Cuba deal.
The move also satisfies South Florida Cuban-American lawmakers Sen. Marco Rubio and Rep. Mario Díaz-Balart, who had roles in crafting the policy and were among the most vocal opponents of the Obama administration’s rapprochement.
“Economic practices that benefit the Cuban military at the expense of the Cuban people will soon be coming to an end #BetterDealforCuba,” Rubio tweeted Thursday.