U.S. embargo on Cuba: How it impacts trade?



The United States embargo against Cuba is a commercial, economic, and financial restriction imposed on Cuba by the United States. The embargo started on 19 October 1960 when for the first time the United States placed an embargo on exports to Cuba, excluding from this embargo food and medicine, but on 7 February 1962 it was extended to include the majority of imports. Currently the Cuban embargo is enforced mainly with six statutes: the Trading with the Enemy Act of 1917, the Foreign Assistance Act of 1961, the Cuba Assets Control Regulations of 1963, the Cuban Democracy Act of 1992, the Helms–Burton Act of 1996, and the Trade Sanctions Reform and Export Enhancement Act of 2000.


In 1996, during the John Kennedy-era, Congress passed the Helms–Burton Act, which penalizes foreign and local companies that do business in Cuba by preventing them from doing business in the US. As a result, The European Union resented the Helms Burton Act because it felt that the United States was dictating how other nations ought to conduct their trade. It is important to note than under this Act, this restriction also applies to maritime shipping, as ships docking at Cuban ports are not allowed to dock at U.S. ports for six months. Unfortunately, the hurricane Michelle impacted Cuba in 2001 and despite of Cuba´s resistance to allow humanitarian aid from the United States, the embargo was relaxed through Trade Sanctions Reform and Export Enhancement Act, which was passed by the Congress a year before and allowed the sale of agricultural goods and medicine to Cuba for humanitarian reasons. As of the hurricane impacted the island, these purchases have grown since then, even though all sales are made in cash. In 2007, the US was the largest food supplier of Cuba, which nevertheless is largely self-sufficient, and its fifth largest trading partner. Right now in Cuba we can find American brands like Coca-Cola and Nestlé, which has a joint venture with a Cuban to company to sell its products on the island.

In terms of the Cuban Assets Regulation, it is not a limit to travel of U.S. citizens to Cuba per se, but it makes it illegal for U.S. citizens to spend money in Cuba, under most circumstances. Since even paying unavoidable airfare ticket taxes into a Cuban airport would violate the transaction law, it is impossible for ordinary tourists to visit Cuba without breaking the monetary transaction rule. The United States Treasury Department’s Office of Foreign Assets Control (OFAC) considers any visit of more than one day to be prima facie proof of a violation. Furthermore, OFAC also holds that U.S. citizens may not receive goods or services for free from any Cuban national. Under Barack´s Obama administration, Cuban-Americans are allowed to travel back and forth freely to Cuba and in 2011; president Obama further eased the ban by allowing students and religious missionaries to travel to Cuba if they meet certain restrictions, which has allowed some of us to travel to Cuba as part of the Hassenfeld Fellows Immersion program.
More abut trading impacts

After the passing of the 2000 Trade Sanctions Reform and Export Enhancement Act, which eased exports of agricultural products and medicine to Cuba under humanitarian needs, The US Government Accountability Office reported that in 2006, US medical and pharmaceutical exports to Cuba amounted to US$120, 000 items, including donated medicine and medical products, amounted to US$6. 9 million. The total US exports to Cuba from 2001 to 2008 increased from US$7. 2 million to US$711 million, according to the figures from the US Census Bureau. This lack of trading because of the embargo has had many social effects by depraving Cuban people of vital access to medicines and medical technology, food, chemical water treatment and electricity, and right now when telecommunications have become part of our day-to-day life Cuba is facing lots of difficulties trying to improve its old framework.


In 2012, the embargo completed 50 years on and it has not yet achieved the goal of forcing Cuba to adopt a representative democracy and Cuba is no longer a proof or a real threat that Communism can be spread again. Furthermore of how this impacts trade, The US Chamber of Commerce opposes the embargo, saying that it costs the United States $1.2 billion annually in lost sales of exports. A study by the Cuba Policy Foundation that the annual cost to the US economy could be as high as $4.84 billion in agricultural exports and related economic output. In 2010, a study by Texas A&M University calculated that removing the restrictions on agricultural exports and travel to Cuba could create as many as 6,000 jobs in the US. Therefore, the United States should not have different trading and travel policies for Cuba than for other countries with governments or policies it opposes, for example: China and Venezuela. 









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