Trump winds up to hit Cuba’s economy - twice

Trump winds up to hit Cuba’s economy - twice
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Cuba is bracing for the impact of a one-two punch from the Trump administration: stricter travel rules and an official warning about visiting the island.

The U.S. is expected to soon publish new regulations that will make it tougher for Americans to travel to Cuba. President Trump announced the rules over the summer, keeping with his campaign promise to crack down on the Communist government.

But the rules will also come in the wake of a new warning issued by the State Department for Americans visiting Cuba following a series of bizarre attacks on U.S. diplomats in Havana.

Some fear that the administration’s moves will deliver a major blow to Cuba’s economy and tourism industry, which are already reeling from a hurricane that tore through the island last month.

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“It’s a really devastating combination,” said James Williams, president of Engage Cuba, an anti-embargo advocacy group. “People [in Cuba] are really nervous.”

The administration is in the final stages of crafting new regulations to fulfill Trump’s Cuba directive, which rolls back a chunk of former President Obama’s historic opening with the island nation.

The directive, unveiled in June, prohibits financial transactions that benefit the business arm of the Cuban military, which controls a wide swath of the tourism industry on the island. The State Department has been tasked with identifying and publishing a list of military-linked entities that will soon be off-limits for American dollars.

Trump’s directive also targets individual “people-to-people” trips, which were made legal by Obama and have allowed American travelers to visit Cuba for educational purposes on their own instead of with a tour group. The administration will be releasing rules that prohibit such individual educational trips to Cuba.

The White House effort is aimed at restricting the flow of U.S. dollars to Cuban President Raúl Castro’s government and instead funneling it toward the growing private sector.

But travel and tourism groups warn that the new restrictions will significantly discourage U.S. travel to Cuba, which had been booming under Obama’s opening. More than 346,000 American citizens visited the island during the first six months of 2017 — a 149 percent increase from the same time last year.

The regulations will also come on top of a brand new headache for Cuba’s tourism industry: The State Department issued a statement last month warning Americans not to travel to Cuba amid growing concerns over mysterious health attacks targeting American diplomats.

U.S. diplomats in Havana began reporting mysterious symptoms, including hearing loss, headaches and balance issues.

The Trump administration followed through with a major drawdown of nonessential personnel and family from the U.S. Embassy in Havana last month, warning travelers that their safety can no longer be guaranteed.

“Because our personnel’s safety is at risk, and we are unable to identify the source of the attacks, we believe U.S. citizens may also be at risk and warn them not to travel to Cuba,” the warning says.

Cuba hard-liners like Sen. Marco RubioMarco Antonio RubioRyan pledges 'entitlement reform' in 2018 Richard Gere welcomes lawmakers' words of support for Tibet Dem lawmaker gives McConnell's tax reform op-ed a failing grade MORE (R-Fla.) have been pushing the State Department for a stronger response to the attacks.

“The State Department must conduct its own investigation independent of the Castro regime and submit a comprehensive report to Congress,” Rubio said in a statement. “Until those responsible for these attacks are brought to justice, the U.S. should immediately expel an equal number of Cuban operatives, downgrade the U.S. embassy in Havana to an interests section, and consider relisting Cuba as a state sponsor of terrorism.”

While the State Department’s travel warning is not binding, travel organizers are concerned that it will damage Cuba’s economy and its reputation as one of the safest travel destinations.

Certain U.S. organizations, universities and companies aren’t even allowed to visit places that have a travel warning in place, due to insurance and liability issues.

“For the American market, it’s going to have a chilling effect,” Williams said.

Williams said that the administration’s actions already appear to be having an impact, noting that the private, family-run restaurants in Cuba have been “half empty” in recent weeks.

Julia de la Rosa, co-owner of La Rosa de Ortega B&B, which is listed on Airbnb, said she has received 29 cancellations from American clients over the last 30 days.

“Now after the travel warning, people just write and make inquiries, but they don’t book,” de la Rosa said. “Our sector will be highly affected by these events, and we know that some entrepreneurs won’t survive.”

Compounding the situation in Cuba is that the island has also been recovering from Hurricane Irma, while September is already a historically slow month for tourism.

Even though Cuba is largely back up and running, there is concern that prospective American travelers might think there are too many dark clouds hanging over Cuba to make the trip.

“People might think it’s just not worth the chance,” Williams said. “There’s just a hangover effect to it.”