(THE CONVERSATION) Presidents Raul Castro and Donald Trump both canceled trips to Aprils Summit of the Americas in Peru, avoiding a potential confrontation – though U.S. Vice President Mike Pence and Cuban Foreign Minister Bruno Rodríguez lobbed insults at each other in their stead.
Relations between the United States and Cuba have grown tense under the Trump administration, which tightened economic sanctions against the Communist Caribbean island in 2017.
We do not want U.S. dollars to prop up a military monopoly that exploits and abuses the citizens of Cuba, Trump declared in June 2017. We will enforce the ban on tourism. We will enforce the embargo.
Those who follow Cuba-U.S. relations closely, as I have for 40 years, may recall that Trump has not always been so antagonistic toward Havana. Back when he was a real estate mogul, he was happy to overlook the embargo – twice, in fact – for a chance to open a Trump-branded hotel or golf resort in Cuba.
In September 2016, when Trump was the Republican presidential candidate, Newsweek magazine revealed that in 1998, Trump Hotels and Casino Resorts hired a consulting firm to explore business opportunities on the island.
Reportedly acting with Trumps knowledge, representatives from Seven Arrows Investment and Development Corp. traveled to Cuba, which was then led by Fidel Castro.
There, they met with government officials and business leaders. The goal, a former official with Trump Hotels and Casino Resorts told Newsweek, was to get a jump on the competition if President Bill Clinton opened up Cuba to U.S. business. Ever since President John F. Kennedy imposed an economic embargo on Cuba in 1962, the Cuban market has been closed to most American companies, including the hospitality sector.
Because their business trip violated the embargo, Seven Arrows advised the Trump organization to disguise its payment to them as a charitable project, according to documents obtained by Newsweek.
The story broke in the homestretch of the 2016 U.S. presidential campaign. In his defense, Trump argued that although Trump Hotels and Casino Resorts had paid for the exploratory trip, it had done nothing wrong because it did not ultimately invest in Cuba.
Trump was courting conservative Cuban-Americans at the time. Because they generally oppose any dealings with the Castro regime, the Newsweek story was a political problem.
Soon after the articles publication, Trump was in Florida making campaign promises to reverse President Barack Obamas Cuba policy, which had relaxed restrictions on travel and re-established diplomatic ties.
But just months before the Newsweek report, Trump had been actively seeking to take advantage of Obamas opening to Cuba, which created a wide range of exceptions to the embargo, including allowing U.S. companies to do business on the island.
Between 2012 and 2015, several Trump Organization executives responsible for developing golf properties traveled to Cuba repeatedly. According to Businessweek magazine, they claimed to be going to the island for golfing and bird-watching.
Businessweek asked Donald Trumps son Eric, then an executive vice president at the Trump Organization, whether these trips had a business purpose.
In the last 12 months, many major competitors have sought opportunities in Cuba, he replied. While we are not sure whether Cuba represents an opportunity for us, it is important for us to understand the dynamics of the markets that our competitors are exploring.
Erics dad was more direct when asked to comment on the Bloomberg story. They had some meetings, Donald Trump admitted to Jim DeFede, an investigative reporter for CBS Miami.
In fact, two business consultants reportedly introduced the Trump executives to possible partners in Cuba and even prepared sketches of what Trump Tower Havana might look like. Miguel Fluxà, chief executive of Spains Iberostar Hotels and Resorts, which operates 17 hotels in Cuba, also said that the Trump Organization was trying to negotiate opening its own hotels there.
In early 2016, Wolf Blitzer interviewed candidate Trump and asked if he would open a hotel in Cuba.
I would, I would, he said, before apparently acknowledging the legal limitations imposed by the embargo. At the right time, when were allowed to do it.
Trumps surprising November 2016 victory put any possibility of a Cuba property deal on ice. To avoid potential conflicts of interest, the presidents attorney pledged that the Trump Organization would enter no new foreign deals while Trump occupied the White House.
In June 2017, Trump announced new sanctions tightening the U.S. embargo on Cuba. They specifically target the countrys tourist industry, effectively prohibiting U.S. hotels from doing business on the island.
Trumps regulations also ban U.S. visitors from patronizing hotels or services run by the Cuban militarys tourism holding company, GAESA, which controls 40 percent of the hospitality business in Cuba. Americans cannot stay at hotels managed by European hotel groups like Iberostar or Meliá, either, if those companies are partners with GAESA.
As a result, the only American hotel company currently operating in Cuba is Marriott International, which was given a license by the Obama administration in 2016 to renovate and manage several Havana hotels. Its contract would be illegal under current regulations. Airbnb is also authorized to work in Cuba because it connects visitors with privately-owned home rentals.
Mainly, though, foreign hotel chains are reaping the benefits of Cubas booming tourism industry. The number of foreign visitors is projected to reach 5 million in 2018, up from 2.5 million in 2010.
The Spanish hotel group Meliá, which currently runs 33 hotels in Cuba, will soon open seven more. Iberostar is planning another 12.
But theres no Trump Tower Havana on the horizon. With its former CEO in the White House, the Trump Organization is missing out on Cubas business bonanza.
Of course, thanks to President Trumps sanctions, his American competitors are, too.
HAVANA (AP) — Raul Castros time in office has seen dramatic changes in Americans ability to travel to Cuba, with a dramatic opening under U.S. President Barack Obama, then a partial reduction under President Donald Trump.
Before former President Barack Obama launched detente with Cuba in December 2014, most Americans without family ties to Cuba could travel to the island only on expensive guided tours dedicated to full-time meaningful interaction with the Cuban people and — in principle at least — avoiding activities that could be considered tourism, which is illegal under U.S. law.
People-to-people tour companies needed special licenses from the U.S. Treasury Department and were regularly audited and faced steep fines or loss of licenses for allowing travelers to engage in tourism.
In Cuba, U.S. tour companies were required to contract guides, tour buses and hotel rooms from the Cuban government, meaning U.S. travelers were effectively under the constant supervision of the government. As a result, they were often presented with activities and talks favoring Cuba government positions on domestic and international issues.
Obama eliminated the tour requirement, allowing Americans to travel to Cuba on individual people-to-people trips that were, in reality, indistinguishable from travel to any other country in the world. Travelers were legally required to maintain logs of their people-to-people schedules, but the Obama administration made clear it would not enforce the requirement.
Online lodging booker Airbnb was allowed into Cuba and commercial flights between the U.S. and Cuba resumed after more than half a century. As a result, U.S. travel to Cuba roughly tripled by the time Obama left office. U.S. travelers engaged in what amounted to illegal tourism, but also pumped hundreds of millions of dollars into independent restaurants and bed-and-breakfasts that drove the growth of Cubas nascent private sector.
Trump re-imposed the requirement that people-to-people travelers could only come to Cuba with heavily regulated tour groups. Many Cuban entrepreneurs have seen reductions in the numbers of American travelers, whose business allowed many private Cuban businesses to flourish after the start of detente.
The policy also banned most American financial transactions with the military-linked conglomerate that dominates much of the Cuban economy, including dozens of hotels, along with state-run restaurants and tour buses.
Most individual American travelers ignore the ban or are unaware of it, and tour groups have found myriad ways of doing business with the Cuban government while respecting the letter of the regulation, for example by doing businesses with the Tourism Ministry and other organizations without direct military ties.
Individual American travelers are still legally able to go to Cuba for the purpose of supporting the Cuban people, a category that includes helping human rights organizations and non-governmental groups meant to strengthen democracy and civil society. In real terms, this sort of travel is largely indistinguishable from people-to-people trips, with Americans visiting the same private businesses, organic farms and musical venues they did under Obama.
Cuban government figures show that 2017 was a record year for tourism, with 4.7 million visitors pumping more than $3 billion into the islands otherwise struggling economy. Most were Canadians, Cuban-Americans, and Europeans, who face no restrictions. Still, the number of American travelers without family ties topped 600,000, more than six times the pre-Obama level. But amid the boom — an 18 percent overall increase over 2016 — owners of private restaurants and bed-and-breakfasts reported a sharp drop-off.
In large part thats because much of the American travel since Trumps regulation has been in cruise ship passengers, a form of travel that the new administration did not restrict. Cruise ship passengers spend all or nearly all of their time in Cuba in activities organized by the Cuban government.
That means that so far, Trumps regulations are steering money into the hands of the Cuban government and away from private businesses, the opposite of their intended effect.