Since January 2025, the Trump administration has enacted a number of measures that represent a significant expansion of economic pressure as an instrument of US foreign policy towards Cuba. From efforts to disrupt Venezuelan oil shipments to the broadening of extraterritorial sanctions and the tightening of financial restrictions, these policies have continued the long-standing US tradition of extending economic regulations well beyond its territorial boundaries.
This past May, President Trump authorized additional measures through Executive Order 14404 aimed at further constraining the Cuban economy and increasing pressure on the social systems in the country. It impacts many sectors of the Cuban economy, including the tourism industry, which has been one of the principal sources of foreign exchange earnings for the island nation. Consequently, Spanish hotel group Iberostar, which entered the Cuban market in 1993, announced the termination of management agreements for twelve hotels during the first week of June. Similarly, Meliá Hotels International, which has been present in Cuba since 1990, announced that it would cease managing and marketing fifteen of its thirty-four resorts on the island. While neither company intended to completely withdraw from Cuba, both have reduced their operational presence in response to the growing legal and financial risks associated with US sanctions.
For decades, Spanish firms operating in Cuba have been subject to a range of pressures associated with the US embargo, including restrictions on access to the US market and investment opportunities. However, July 23, 2026 marked the end of an era, as Meliá Hotels International officially announced the termination of all of its operations in Cuba. Although the oil blockade and additional financial restrictions exacerbated Cuba’s already severe fuel shortages, electricity blackouts, transportation disruptions, and supply chain problems, the sanctions imposed against Cuba’s Ministry of Tourism (MINTUR) on July 13, 2026 appear to have played the pivotal role in Meliá’s decision to completely withdraw from the island, as they substantially increased the legal and commercial risks associated with continuing operations.
The effects of embargo are not limited to Spanish firms. Other international tourism operators, including the Canadian company Blue Diamond and Indonesia-based Archipelago International, have also reduced their activities in Cuba. At the same time, several major Canadian travel providers have indefinitely suspended flights and vacation packages to the island. Moreover, the Canadian government has warned citizens to avoid non-essential travel to Cuba “due to worsening shortages of fuel, electricity, and basic necessities including food, water, and medicine.” These developments further weakened a tourism sector that has long depended on Canadian visitors, who have accounted for the majority of international tourists to Cuba since the 1990s.
The decline in tourism-related economic activity has not only affected hotel employees, but also local communities whose livelihoods depend on spending by visitors. The drastic reduction of foreign hotel operations and the suspension of international travel services have contributed to rising unemployment, decreasing household incomes, and growing economic insecurity among tour guides, taxi drivers, artisans, musicians, dancers, restaurateurs, and numerous other service providers that rely, directly or indirectly, on tourism revenue, as well as gifts.
Foreign visitors have also long served as an informal channel through which goods that are otherwise difficult to obtain can be brought into the country. For example, visitors frequently transport over-the-counter medicines, baby formula, hygiene products, clothing, vitamins, and other essential items for relatives, friends, and acquaintances. Now, as the number of travelers declines precipitously, these informal networks of support have become increasingly constrained, thereby reducing access to some of the goods that many Cuban families have come to rely upon. Thus, the restrictions strengthened by the Trump administration have impacts that extend well beyond entities directly controlled by the Cuban government, as they have significantly disrupted economic relationships throughout the broader tourism ecosystem and weakened local commercial networks that have developed around it.
As employment opportunities and access to foreign-currency earnings decline, many Cuban households face increasing difficulty obtaining basic necessities in an economy already affected by chronic shortages. The reduction in foreign currency inflows also makes it more difficult for Cuba to finance imports of essential goods from the United States. Under US law, as implemented through the Cuban Assets Control Regulations (CACR), authorized exports of agricultural commodities to Cuba are subject to special payment and financing restrictions. Specifically, 22 USC. § 7207(b)(1) and 31 CFR § 515.533(a)(4) permit either payment in cash in advance—defined as payment before the transfer of title and control—or financing by an eligible banking institution located in a third country. In other words, American exporters generally have to be paid in full before any goods change hands, unless financing is obtained through an eligible bank in a third country.
The American government has banned its citizens from travelling to Cuba since 1961, towards the end of the Eisenhower administration. However, by making changes to its Cuba policy over the years, the US has also managed to make it more difficult for travelers from all over the world to access the island nation. For example, the US Department of State designated Cuba a State Sponsor of Terrorism on January 12, 2021, meaning that citizens of Visa Waiver Program (VWP) countries who have traveled to or been present in Cuba on or since that date are, with limited exceptions, no longer eligible to travel to the United States using the Electronic System for Travel Authorization (ESTA). Instead, they must generally apply for a US visa. Moreover, travelers who are dual nationals of a VWP country (e.g., Germany, France, Spain, Italy, Japan, Australia, etc.) and Cuba cannot use ESTA to travel to the United States and must apply for a visa at a US embassy or consulate. This policy is applied to no other country besides Cuba.
Rothbard was very aware of the imperialistic policies that the US government directed against Cuba, as he stated that “after virtually installing the dictator Batista in Cuba, the United States tried desperately to oust the Communist Castro regime, by actions ranging from the CIA-engineered Bay of Pigs invasion to CIA-Mafia attempts to assassinate Castro.” From a Rothbardian perspective, the recent developments with respect to the American embargo illustrate how sanctions can discourage voluntary economic relationships between foreign and domestic economic agents, including firms, investors, travelers, and service providers, that might otherwise emerge through market processes. The present contraction in tourism to Cuba is not the result of changing consumer preferences on the part of international travelers or normal business conditions assessed by foreign companies; rather, it was the outcome of policies designed by Washington to facilitate regime change through legal and financial means. In this sense, the sanctions function as a form of economic coercion that restrict the ability of foreign businesses to engage in peaceful exchanges with Cuba and limit the freedom of individuals to choose Cuba as a travel destination.
Regardless of one’s views on the Cuban socialist regime, the humanitarian consequences of such measures warrant serious consideration. Moreover, such measures violate liberal and democratic values and principles. Respect for liberty and self-determination not only requires opposition to political repression, but also skepticism towards policies that seek to achieve political objectives through the economic isolation of an entire society.
From a libertarian perspective, sanctions raise important questions about the legitimacy of using state power to restrict voluntary exchange, as well as the human costs imposed on individuals who play no direct role in political decision-making. Rothbard defended “complete abstinence from any kind of American military intervention and political and economic intervention.” Lifting travel, trade, financial, and economic restrictions against Cuba would be an important step in allowing the country to continue implementing its free-market reforms, while also maintaining its own self-determination.
