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The Trump administration is implementing what experts are calling the most significant expansion of US sanctions on Cuba in decades.
The administration is attempting what supporters say is the first comprehensive application of Cuba-related secondary sanctions against foreign companies, aimed not only at Havana but also at foreign companies and banks that continue to do business with the island’s military-linked economic empire.
The new framework, established under an executive order signed by President Donald Trump on May 1, applies pressure beyond US companies for the first time, threatening foreign companies with the risk of sanctions if they continue to operate in key sectors of the Cuban economy linked to Grupo de Administración Empresarial SA, or GAESA.
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Supporters say the move closes a loophole that had allowed foreign investors to maintain Cuba’s communist regime while a long-standing U.S. embargo largely restricted Americans from entering.
Critics argue that these measures risk worsening the already severe humanitarian crisis on the island without meaningfully weakening the government.
Protesters attempted to burn down the Communist Party headquarters in Morón, Cuba, after authorities reportedly opened fire on protesters without warning. (Obtained by Fox News Digital)
“At the end of the month, what the Trump administration did was for the first time increased the application of US sanctions, from banning trade between US companies and US individuals and third-party countries and supporters between the island of Cuba,” Max Meislich, a former Treasury Department official who now serves as a research fellow at the Foundation for Defense of Democracies, told Fox News Digital in an interview.
“For the first time, in a really unprecedented way, the administration is now applying this same logic to Cuba,” he said.
The sanctions focus heavily on GAESA, a giant military-linked conglomerate that analysts estimate controls between 40% and 70% of Cuba’s economy, including tourism, mining, retail, ports and financial services.
A recent Foundation for Defense of Democracies report, authored by Meislich and Connor Pfeiffer, argued that foreign companies doing business in Cuba are effectively helping maintain the regime’s military and political leadership.
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The image of Fidel and Raul Castro and Cuban President and First Secretary of the Communist Party Miguel Diaz-Canel is displayed on a billboard in Havana on April 12, 2023. (Alexandre Meneghini/Reuters)
The State Department sanctioned GAESA and several affiliated entities in May under new authorities, opening the door to potential penalties against foreign companies and financial institutions that continue to transact with them after the June 5 closing deadline.
Meizalish argued that previous sanctions regimes failed because they isolated American companies while allowing foreign actors to continue financing the Cuban state.
He said, “There are, for example, a number of Spanish companies that have invested millions of dollars in luxury hotel properties, villa properties in Cuba, that partner with GAESA, and all finance this military enterprise at the expense of the Cuban people.”
He also pointed to Canada’s involvement in Cuba’s nickel and cobalt fields, saying that foreign investment has generated “huge amounts of money for the regime.”
“A lot of people think that the U.S. embargo over the last few years is really responsible for a lot of the problems on the island of Cuba, but they don’t take into account the fact that GAESA, this newly sanctioned entity, is sitting on an estimated $20 billion of assets and cash over the course of a year, depriving the Cuban people,” Mezlich told Fox News Digital.
But critics of the policy warn that the worst effects of the economic fallout may fall on ordinary Cubans.
William LeoGrande, a longtime Cuba expert at American University, said the May 1 measures represent a major escalation because they specifically target foreign businesses rather than just Americans and aim to deter foreign companies from doing business with GAESA by threatening sanctions.
Leogrande acknowledged that the measures could deprive the Cuban government of revenue, but argued that the broader population was most likely to be harmed.
Cuba’s entire electrical grid collapsed, leaving the entire island without power.
A woman signals a car with her son on a dark road during a blackout in the Bauta municipality of Artemisa province, Cuba, on March 18, 2024. (Yamil Lage/AFP via Getty Images)
“This will potentially deprive the Cuban government of money, but it will mainly impact ordinary citizens because it means the government has fewer resources to import food, medicine and fuel,” he said.
The debate comes as Cuba faces its deepest economic and humanitarian crisis in years.
The World Food Program says food insecurity is worsening amid fuel shortages, inflation and declining access to imported goods, while U.N. officials warn that power shortages and blackouts are disrupting hospitals, vaccination programs and food distribution networks across the island.
LeoGrande also warned that tighter restrictions could contribute to another migration crisis.
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Protestors took to the streets in Cuba over food and electricity shortages. (Reuters)
LeoGrande said, “Another unintended effect is that by making living conditions in Cuba more desperate, tighter sanctions could trigger mass migration similar to what we saw in the 1980s or 1994.”
In the background, a US official rejected arguments that US sanctions are to blame for Cuba’s humanitarian crisis.
“The suffering of the Cuban people is not because of the U.S. embargo but because of the Cuban dictatorship’s failed communist policies and human rights violations,” the official told Fox News Digital. “The embargo does not restrict Cuba’s access to world markets or trade with third countries.”
The official said U.S. law clearly allows exports of food, medicine and medical equipment to Cuba and accused the regime of “hiding billions of dollars in foreign bank accounts instead of investing in electricity, infrastructure and the daily needs of its people.”
The debate mirrors the long-running debate over US sanctions on countries such as Iran and Venezuela, where supporters see economic pressure as a tool to weaken authoritarian governments, while critics argue that regimes often survive and civilians endure economic damage.
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Meislich argued that sanctions should not be assessed solely by whether they immediately topple governments.
“The problem is not that the ban goes too far,” he said. “It’s just that it didn’t go far enough.”
Fox News Digital contacted the Cuban Embassy in Washington for comment but did not receive a response by the time of publication.
