Cigar Aficionado

Making good on a campaign promise to Cuban-Americans in Miami to "demand" reforms in Cuba, President Trump today returned to that city to announce new restrictions on U.S. travel and trade to the island. Cigar smokers will be pleased to know that the rules regarding purchasing Cuban cigars and bringing them back to the United States remain intact—at least for now.

Speaking at a rally held at the Manuel Artime Theater in Little Havana—the stronghold of hardline opposition to engagement with Cuba—Trump denounced the historic breakthrough in relations during the Obama administration and promised to pressure the Cuban government to democratize and end human rights violations.

"With God's help," he promised the audience of Cuban-Americans that included dissidents and veterans of the Bay of Pigs invasion, "a free Cuba is what we will soon achieve."

After introductions by Cuban-American Rep. Mario Diaz Balart and Florida Sen. Marco Rubio, the chief architects of the new restrictions, Trump signed a new Presidential Directive, curtailing both travel to, and commerce with, the island in the future.

"Effective immediately I am cancelling the last administration's completely one-sided deal with Cuba," Trump stated. "I am announcing a new policy, just as I promised during the campaign. Our policy will seek a much better deal for the Cuban people and for the United States of America," the president declared as the crowd chanted "USA, USA."

In fact, the new policy leaves much of the Obama opening intact, including the ability of travelers to buy and repatriate as many boxes of cigars, and bottles of rum, as they can carry. (That could change in the future as the Treasury Department finalizes regulations to implement the new directive.) But Trump's restrictions, which are expected to be formulated as Treasury Department regulation within the next few months, do roll back other key areas of Obama's open-door policy on travel and trade with Cuba, which are predicted to result in fewer future visitors from the United States.

Trump's recalibration of policy will most immediately affect the latitude of U.S. citizens to travel to Cuba. Under Obama's relaxation of travel regulations, U.S. citizens could designate the purpose of their travel under one of 12 specific categories, which included the broadly defined "educational" travel and "people-to-people" travel. This "self-designation" mechanism contributed to a surge in travel over the last two years, with more than 600,000 tourists visiting the island in 2016.

But Trump's new restrictions eliminate the self-designation process, and according to the Treasury Department's Office of Foreign Assets Control, "will end individual people-to-people travel." Unless U.S. travelers qualify for one of the specialized categories of travel—journalism, religious work or academic research, for example—they will have to travel with licensed tour groups and prove they spent all their time in Cuba doing people-to-people activities. The new directive empowers the Treasury Department to audit U.S. travelers and immigration officials will be able to demand records and journals from returning travelers to demonstrate they are in compliance with the new restrictions. Those who are not could face hefty government fines.

Under the new Trump regulations, those restrictions have been expanded to prohibit U.S. citizens from staying in, eating at, or spending any money at numerous state-owned hotels and other businesses that fall under the umbrella of Cuba's Business Enterprise Group (GAESA). GAESA, a conglomerate of economic entities controlled by the Cuban military, oversees up to 60 percent of the economic activity in Cuba. Besides hotels, GAESA controls restaurants, tourism buses and other economic and tourist-related agencies.

Trump's directive means that U.S. visitors will no longer be able to stay at some of Havana's most popular hotels, among them the elegant Saratoga favored by U.S. senators, governors and Congressional representatives who have visited Cuba over the last several years, and the Santa Isabel, where former President Jimmy Carter stayed during his two trips to the island. The five-star Gran Manzana Kempinski Havana Hotel that opened just last month also falls under the GAESA umbrella and will be off-limits to U.S. citizens. As a guide for future travelers, the State Department plans to publish a list of prohibited hotels and businesses they will now have to avoid.

The Trump directive also takes aim at any future U.S. financial and business transactions with GAESA-controlled entities—which will substantially limit U.S. commercial interests in doing business in Cuba. The new restrictions will not affect U.S. airlines and cruise ships, but could dramatically reduce future business engagement for U.S. manufacturers and hospitality industry suppliers who are seeking investment opportunities on the island.

In recent days, those business interests, along with Cuban entrepreneurs whose new private sector businesses depend on U.S. tourist traffic, have forcefully lobbied the Trump administration to further open travel and trade, rather than restrict it. Google released a statement highlighting the gains in connectivity on the island; AirBnB published a revenue report showing $40 million going to some 22,000 Cuban hosts over the last several years.

White House officials cast the new policy as a way of channeling support away from the Cuban state enterprises and into the hands of Cuban entrepreneurs. But critics of the policy pointed out that the new restrictions were likely to hurt individual Cubans, with fewer individual travelers staying in private Airbnb homes, and larger tour delegations forced to stay at state-owned hotels and using state-owned buses for transportation instead of privately owned taxis. (Not all state-owned operations are run by GAESA.) Numerous analysts in the travel industry warned that the ominous threat of Treasury Department traveler audits would have a chilling effect on future visitation to the island.

The most rousing rebuttal came from the architect of President Obama's normalization policy, former deputy national security advisor, Ben Rhodes, writing in The Atlantic. "Trump's announcement should be seen for what it is: not as a step forward for democracy, but as the last illogical gasp of a strain of American politics with a 50-year track record of failure; one that wrongly presumes we can control what happens in Cuba."

Peter Kornbluh writes frequently for Cigar Aficionado on Cuba. He is co-author, with William M. LeoGrande, of Back Channel to Cuba: The Hidden History of Negotiations Between Washington and Havana.