Trump’s Demands on Cuba Uncertain, Leaving Companies to Wonder
Jan 19, 2017 7:00 AM EST
Friday’s presidential inauguration of Donald Trump threatens to quash
the U.S.’s recently-revived relations with Cuba, leaving companies with
dealings in the country uncertain about their prospects.
While companies including cruise line Carnival (CCL) have made
significant strides in expanding business to Cuba, riding on the success
of the Obama Administration’s end to a 50-year period of isolation with
the island, their efforts could be thwarted due to Trump’s proposal of
reversing the president’s orders.
“All of the concessions that Obama has granted the Castro regime were
done through executive order, which means the next president can reverse
them and that is exactly what I will do unless the Castro regime meets
our demands,” Trump said while campaigning in Miami on Sept. 16.
Although it is unclear what Trump’s demands are, the president-elect
reiterated his stance in a Nov. 28 tweet, saying “If Cuba is unwilling
to make a better deal for the Cuban people, the Cuban/American people
and the U.S. as a whole, I will terminate the deal.”
In December of 2014, President Barack Obama announced he would lift the
longstanding U.S. trade embargo on Cuba. The sanctions trace back to a
1962 trade embargo imposed by President John F. Kennedy and stem from a
U.S. push to have Cuba move toward democratization and improve human rights.
Other companies that have opened for business in Cuba since 2014 include
e-commerce booking company Airbnb, credit card company MasterCard (MA)
, Internet television streaming company Netflix (NFLX) and passenger
carrier company JetBlue Airways (JBLU) .
“I think we should focus on human rights, in Cuba, in Russia, in Iran,
whatever. That’s great, how you accomplish that is another issue,” said
John Caulfield, a retiree of the U.S. State Department.
Caulfield served as the Chief of Mission of the U.S. Interests Section
in Havana, Cuba, from September of 2011 to July of 2014. Throughout his
30-plus years’ career, he held various positions dealing with Latin
America and Consular Affairs.
Caulfield said trying to get Cuba to change through sanctions has not
met the success the U.S. hoped for.
“The more we are involved, the more we can help [the Cuban government]
go in a positive direction,” Caulfield said.
Currently, all there is left to do is wait and see what Trump’s effect
on Cuban relations will be. Caulfield said there is concern on both the
U.S. side – where airlines and cruise companies sought new customers by
expanding to Cuba – and on the Cuban side – where citizens who have
opened taxi services or other tourist-driven companies since relations
eased are at risk of losing American customers.
After Trump was elected as the 45th President of the U.S., companies
including Royal Caribbean Cruises (RCL) and Norwegian Cruise Line (NCLH)
began pushing to get actions passed to allow them to open up business in
Cuba, fearing they did not have much time.
In early December, both Royal Caribbean and Norwegian were approved to
begin sailing to Cuba. Norwegian’s first ship, the Oceania’s Marina,
will depart on March 7 and Royal Caribbean’s first cruise, Seven Seas
Mariner, will make its voyage in April.
While Carnival received approval for sailings to Cuba on its Fathom
brand, the company still has pending requests for additional cruises to
make trips to the island. It is unclear what effect Trump will have on
these negotiations but Carnival CEO Arnold Donald said on a recent
earnings call that Cuba is a “longer-term play” for the company.
Carnival declined to comment on the issue of Trump, electing to instead
say “today, we are only sailing to Cuba on one small ship, but we have
been very pleased with our first season of cruising to Cuba, and look
forward to the opportunity to add more sailings from more of our brands
later this year.”
The uncertainty surrounding Trump and his position on Cuba is being felt
by smaller U.S. companies, as well.
“There’s concern in the entire travel industry that President Trump will
undo all the progress made by President Obama in opening up Cuba to
American tourists,” said Greg Geronemus, co-CEO of smarTours, a New York
City-based guided tour company.
SmarTours has taken roughly 200,000 travelers to 40 destinations
worldwide, including Cuba. In 2014, Geronemus said smarTours gained
approval to begin trips to Cuba, making it one of the first guided tour
companies to visit the country.
Geronemus said Cuba is one of the company’s “hottest destinations” and
is concerned that “any change would impact smarTour’s business.”
Source: Trump’s Demands on Cuba Uncertain, Leaving Companies to Wonder –