A Trump attempt to reverse Obama’s Cuba policies could be complicated and costly

Trump, Obama meet for first time at White House

President Obama promised president-elect Donald Trump that his team would help ensure a smooth transition to power: "....we now are going to do everything we can to help you succeed because if you succeed then the country succeeds." Trump said, "I
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President Obama promised president-elect Donald Trump that his team would help ensure a smooth transition to power: "....we now are going to do everything we can to help you succeed because if you succeed then the country succeeds." Trump said, "I

President-elect Donald Trump has said “concessions” the Obama administration made to Cuba can easily be reversed and that he will unravel them unless U.S. demands are met, but some of the commercial initiatives may be a bit harder to undo than merely signing an executive order.

“The weakness of executive branch action is that what one president does another can easily undo. Trump can rescind the executive orders, but I think it’s unlikely that he would do a wholesale repeal of Obama’s executive actions,” said Robert Muse, a Washington lawyer. “It’s a bigger decision than it might appear.”

Since the normalization process began, a Miami-based cruise line has begun to sail to Cuban ports, U.S. telecom companies have established roaming agreements with Cuba, commercial airlines are flying from U.S. cities to Cuba, Marriott has entered into a joint venture to manage some Cuban hotels, and Cuba has become Airbnb’s fastest growing market.

A pharmaceutical joint venture is about to begin clinical trials in the United States, other U.S. companies are in various stages of trying to close deals with Cuba and travel to the island by Americans has greatly expanded.

These ventures and expanded travel were all made possible by executive orders and regulatory changes since President Barack Obama and Cuban leader Raúl Castro began a process of rapprochement on Dec. 17, 2014 and would be affected by any abrupt change in U.S. Cuba policy.

Because the companies struck deals in good faith based on existing U.S. regulations, they could be entitled to compensation or would need to be grandfathered-in to new policies, said Muse. That interpretation is based on a provision of the Fifth Amendment that says no one can be deprived of property “without due process of law; nor shall private property be taken for public use, without just compensation.”

“These companies have expended real time and money on these deals,” he said.

Obama’s policies also have been designed to encourage Cuba’s budding self-employed sector, and U.S. business executives, including some Cuban-Americans, have tried to encourage Cuba’s new entrepreneurs with advice and support.

“Reversing Cuba policy also would mean we are turning our backs on them,” said Carlos Gutierrez, who served as secretary of commerce under George W. Bush and has traveled to Cuba numerous times since the rapprochement began. Throwing out all of Obama’s initiatives would “be complicated and not an easy call,” he said.

Reversing Cuba policy also would mean we are turning our backs on them.

Carlos Gutierrez, former U.S. secretary of commerce

“It’s politically difficult to say to U.S. business interests that I’m just going to change the law of the land. It carriers a political cost,” said Pedro Freyre, a Miami lawyer who has represented companies interested in doing business with Cuba.

Here’s a look at some areas that could change under a Trump presidency:

▪ The U.S. Embassy in Havana — Trump could downgrade it to a U.S. Interests Section again or even close it.

“In foreign affairs, the president’s authority is at its fullest extent,” said Muse. When the United States decided to break off relations with Cuba in 1961, it was a presidential decision.

But Gutierrez said Congress has provided no additional funding for the U.S. Embassy in Havana even though the embassy’s workload has expanded and it handles necessary interactions between the two countries. “Why would he close it?” he asked.

The nomination of Jeffrey DeLaurentis, currently chief of mission in Havana, as the first U.S. ambassador to Cuba in more than 50 years also could be a casualty of a Trump presidency. Obama nominated him in September and he has yet to be confirmed by the Senate.

▪ Immigration — If Trump wanted to bring Cuban immigration policy into line with his stated position to prevent waves of illegal immigrants from entering the United States, it would be fairly easy to do.

Wet foot/dry foot, which generally allows Cubans who make it to U.S. shores to remain and sends back those picked up at sea, is a policy, not a law, and could be changed from one day to the next.

The Cuban Adjustment Act, which allows Cubans to apply for permanent residency in the United States after a year — even if they arrive without a visa or are smuggled into the country — gives the U.S. attorney general the discretion to grant them parole. The law could remain in effect, “but the attorney general could stop granting discretionary parole,” said Muse.

▪ Travel — Ever since the 1960s, various U.S. presidents have expanded and limited travel to Cuba. Currently Cuban-Americans may make unlimited family visits to the island and other Americans who fall into 12 categories, such as those making educational trips or on people-to-people tours, also are allowed to travel to Cuba.

But during his presidency, George W. Bush barred people-to-people visits and limited visits by Cuban-Americans to once every three years. Rather than rescinding the licenses of people-to-people tour operators, the Bush administration let their two-year licenses run out and didn’t renew them.

If Trump were to place restrictions on U.S. travelers, he would probably have to make such a policy effective at a future date, because reservations and hotel deposits by travelers would be affected, Muse said.

▪ Presidential policy directive — In October, Obama issued a 12-page presidential policy directive that sought to institutionalize his changes toward Cuba. It was intended to be used as manual to help guide federal agencies in their future relations with Cuba. Such presidential directives generally aren’t made public and can be changed from one administration to the next. Administrative officials said it would help make the Obama opening toward Cuba “irreversible.”

But some believe that the new U.S.-Cuba relationship hasn’t progressed to the point that it is irreversible. “There was a lot of loose talk about irreversibility. It was wishful thinking,” said Muse.

The question is whether Trump the businessman or Trump the politician will prevail when it comes to Cuba policy. During the campaign both sides were in evidence.

In recent weeks, Trump has said he can reverse Obama’s executive orders and will “unless the Castro regime meets our demands. Not my demands — our demands. Those demands will include religious and political freedom for the Cuban people, and the freeing of political prisoners.”

In an effort to win Cuban-American votes, he repeated that message in Miami just a week before the election.

But on previous occasions he said normalization was fine — although he thought Obama’s policies didn’t go far enough in pushing U.S. interests and that he intended to get a better deal.

“During the campaign he also said 50 years of the same policy was enough, and then he started fund-raising and came to Miami and was convinced to take a different approach,” said Gutierrez, who is now chairman of the Albright Stonebridge Group and favors engagement with Cuba.

Based on Trump’s recent rhetoric and “the people he has been surrounding himself with, he may reverse what has been done, and I think that would be a shame,” he said.

Pro-embargo Cuban-Americans have been encouraged by Trump’s recent comments and his win in Florida.

“Candidates should stop taking advice from a handful of greedy businessmen who are clueless as regards the real pulse of the Cuban-American community,” said Mauricio Claver-Carone in the Capitol Hill Cubans blog. He said Trump’s Cuban-American supporters will hold him to his “commitment to reverse Obama’s executive orders.”

“He would be killing dozens of American deals, blowing it all up for some Cuban-American votes. Where is the logic in that?” asked Freyre, the chairman of Akerman law firm’s international practice. Trump, he pointed out, also won big in the Midwest farm states that want to sell agricultural products to Cuba and are pushing to have a financing prohibition lifted so their products will be more competitive.

He would be killing dozens of American deals, blowing it all up for some Cuban-American votes. Where is the logic in that?

Pedro Freyre, Miami lawyer

Some Republicans believe a change in Cuba policy under Trump wouldn’t necessarily mean dismantling the entire normalization process.

“What I hope as a Republican and as someone who has been involved with Cuba for 24 years is that Trump would look at the potential for business with Cuba and fast-track things,” said Charlie Serrano, managing director of Chicago-based Antilles Strategy Group, which has taken congressional leaders and business executives to Cuba.

Obama’s regulatory changes were made piecemeal and the Cuban side has been slow to take the U.S. up on many business overtures.

“Some of this stuff is not moving fast enough,” Serrano said. “I think Trump will be interested in getting Cuban policies in a place where the United States benefits more. My hope is he will look at things from a business point of view. Canceling out everything that Obama has done would not be a good thing; it wouldn’t be wise for American business.”

Analysts say that if Obama’s overtures had actually increased trade between the two countries significantly or if the Cuban side had facilitated U.S. investment in Cuban infrastructure projects, it might have created more stakeholders and made Obama’s policies more difficult to reverse.

“There will be political push on all sides; there will be business push,” said Freyre. Cuba policy “will be an interesting exercise for our next president. We are definitely in for some interesting times.”