The recent demonstrations in Cuba have been met with excitement by Cuban Americans in Miami hoping for the fall of the Cuban government. The Biden administration attributes the turmoil to the country’s political repression and poor economic management, while professing concern for the Cuban people. Pundits for the most part have attributed Cuba’s economic crisis, and the demonstrations, to state measures, such as reductions in internet connectivity; to the pandemic, which has paralyzed much of the economy; and to the loss of oil imports from Venezuela. U.S. sanctions are mentioned only in passing, then dismissed in one way or another. We’re told that there are so many factors at play that it’s impossible to know what harm, if any, can be attributed to the sanctions. Or we’re told that the actions of the Cuban government are really the core of the crisis, and the situation would surely be the same even without the sanctions. Or we’re told the purpose of the sanctions is to call attention to Cuba’s human-rights violations, and that any incidental, unintended consequences are outweighed by the good that they are intended to do.
It is certainly the case that the pandemic has had a huge impact on the country, and that state policies of various kinds may also have played a significant role in Cuba’s economic situation. But more needs to be said about the U.S. sanctions, which are nearly comprehensive, indiscriminate, and quite devastating, not only to every aspect of Cuba’s economy, but also to the daily lives of the 11 million people living on the island. They are also nearly insurmountable. Even if the government responded with singular efficiency and resourcefulness, it would be impossible to find adequate workarounds for U.S. efforts to block Cuba’s imports and exports, its access to fuel, capital, and equipment critical for its infrastructure, and its ability to engage with the international banking network. Any one of these forms of systemic damage would be crippling on its own. Together, they have ensured a catastrophic level of harm, affecting every sector upon which the economy, and human well-being, are reliant.
The U.S. sanctions regime against Cuba has some statutory components that can only be changed by Congress. Two of the most damaging laws were adopted in the 1990s: the Torricelli Act of 1992 and the Helms-Burton Act of 1996. The Torricelli Act prohibited foreign subsidiaries of U.S. companies from trading with Cuba. This runs completely counter to international commercial law, according to which a company’s nationality is determined by where it is incorporated, not by the nationality of its owners. As a result of the Torricelli Act, companies all over the world were subject to severe penalties by the U.S. Treasury Department if they bought or sold goods or services from Cuba. U.S. trading partners were infuriated. In response to these two statutes, Canada, Mexico, the United Kingdom, and other nations passed “clawback” retaliatory legislation, and the U.K. and the EU brought an action against the United States before the World Trade Organization. Still, the effect on Cuba was enormous: it was barred from trade not only with U.S. companies, but also with countless other companies throughout the world.
The Torricelli Act also provided that any ship that docked in Cuba could not enter a U.S. port for six months. But of course, any cargo ship coming from Europe or Asia would be likely to carry goods to the United States, with its enormous market. As a result, for Cuba to import goods from, say, Europe, it often had to pay double—it would pay for the ship to deliver goods to Cuba, and then pay for it to return empty, if Cuba did not have enough goods to send as exports. So Cuba’s shipping costs greatly increased—a particularly onerous burden for an island nation. And this rule applied not only to U.S. shipping companies, but to ships based anywhere in the world.