The executive order issued by the White House on May 1 has shaken Cuba’s foundations. The United States decided to tighten the noose around an economy that was already in intensive care even before the new sanctions that took effect on Friday, or the oil blockade implemented earlier this year. Washington’s threat to freeze assets on U.S. territory of any foreign company or individual doing business with the Cuban regime — especially with the vast portfolio of businesses held by Gaesa, the military conglomerate that controls half of Cuba’s GDP — has produced its first effects. And once foreign companies withdraw, their replacement by U.S. firms appears to be the next step.

Within weeks, two large Spanish hotel chains (Meliá and Iberostar) were forced to abandon part of their operations, giving up management of 15 and 12 hotels respectively that were owned by the Armed Forces. That withdrawal, however, will not spare them from lawsuits by the Cuban government, which will demand compensation for unilaterally terminating their management contracts. Canada’s Blue Diamond and Indonesia’s Archipelago International have also exited their businesses entirely, while the shipping lines CMA CGM (France) and Hapag-Lloyd (Germany) have chosen to halt container deliveries. The exodus has not only hit tourism, the main pillar of Cuba’s economy. It has also struck mining, which accounts for a third of goods exports. Canadian company Sherritt International, which had a joint venture with the island’s government, disclosed a nonbinding agreement under which Gillon Capital, a firm linked to a former adviser to Donald Trump, would acquire a 55% stake.

Business sources close to the Cuban government summarized to EL PAÍS two weeks ago what they believe is the sole objective of the U.S. sanctions: “They want to take over the Galicians’ business” [referring to Spaniards who emigrated to Cuba at the end of the 19th century].

The first candidates could be Marriott, the world’s largest hotel company with 7,781 hotels, and Airbnb, the largest short-term rental platform, with nine million listings. Both have already operated or currently operate in Cuba under special licenses granted by the U.S. government during Barack Obama’s second term in the so-called “Cuban thaw.” They have never concealed their interest in continuing to expand on the island. Between 2016 and 2020, Marriott managed the Four Points by Sheraton Havana, becoming the only property operated there by a U.S. giant. Arne Sorenson, Marriott’s former CEO, was one of the business executives who accompanied President Obama on the March 16, 2016, flight that marked the start of that new phase.

Airbnb, for its part, landed in April 2015 with 1,000 listings, but was restricted to hosting only U.S. tourists. In its first year it welcomed 13,000 travelers and the number rose to 35,000 listings by 2019, once an exceptional permission was granted to host non-U.S. guests as well. From there the numbers fell sharply because of successive economic crises and the pandemic, despite relief measures approved during Joe Biden’s administration. The final blow came from a Department of State order dated January 31, 2025, which restricted Cuba’s access to international banking and forced hosts to find alternative payment methods abroad, collapsing the business.

A devastating outlook for Cuba

The picture painted by these initial moves, together with those that may follow soon, is, at best, devastating. For Max Meizlish, a former Treasury Department official from 2020 to 2024 and a researcher at the Foundation for Defense of Democracies (FDD), this is unprecedented pressure. “Washington’s pressure aims to definitively turn the Caribbean country into a financial pariah, without external sources of financing. Right now, what we see is that all these strategic sectors of the Cuban economy that have touchpoints with foreign firms are being pressured for the first time,” he concludes in a Zoom call.

The onslaught arrives at a moment of extreme vulnerability. In recent years the Cuban government has implemented a severe austerity plan that includes cuts to public spending, a reduction of the bureaucratic apparatus, lower subsidies and an unprecedented increase in basic service fees, alongside a partial dollarization of the economy that operates with up to three different exchange rates. As an extraordinary measure, the regime decided to allocate budget resources month by month based on its revenues. Not to mention power outages that in large areas exceed 24 consecutive hours. “This is already worse than a wartime economy,” Cuban economist Omar Everleny Pérez says by phone.

Other experts point to two intertwined founding errors: betting everything on tourism and giving the military free rein through Gaesa, to concentrate economic power in accounts that cannot be audited by the state. In 2016, the military holding now targeted by Trump launched an ambitious hotel plan during the thaw with Obama in a bid to reach 100,000 rooms by 2030. “We cannot wait for the blockade [U.S. economic embargo] to end to build the hotel capacity,” President Miguel Díaz-Canel justified. For Pérez, those economic mistakes have put a noose around the country’s neck. Or, put another way, they have made Washington’s job of strangling the island easier.

The crux of the matter, says Max Meizlish, is that the executive order leaves the door open for the Trump administration to further expand economic pressure. Among the options available is pushing international banks to freeze funds of entities tied to the government and its military leadership. “What I would expect from any of these banks that want to comply with the terms of the executive order is that they block them. Make them feel trapped. And have those funds moved so they are inaccessible to the regime,” the former Treasury official says.

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