Election 2020 Archives - Customs & International Trade Law Firm

Since the early 1960s, the U.S. maintained a policy of economic sanctions towards Cuba. The U.S. policy sought to isolate the Cuban government. In 2014, the Obama administration significantly changed U.S. trade and economic policies towards Cuba by restoring diplomatic relations, rescinding Cuba’s designation as a state sponsor of terror, and permitting increased trade between the two countries. This period was known as the Cuban Thaw.

However, under President Trump’s administration, the Obama administration’s efforts to normalize relations have been rolled back. In November 2017, the Trump administration restricted financial transactions with entities controlled by the Cuban government. Furthermore, many new entities have been added to the Cuba restricted list under the Trump administration. As of 2019, the Trump administration has more or less abandoned engagement with the Cuban government, and has opted instead to increase sanctions based on Cuba’s human rights violations and its support of the Venezuelan government under Nicolas Maduro.

Significant U.S. sanctions towards Cuba under the Trump administration include:

Restrictions on transactions with the Cuban military. The U.S. State Department issued a “Cuba restricted list” in 2017 which it has continued to update. The U.S. Treasury Department forbids financial transactions with these entities. There are exceptions, however, for agricultural and medical commodities, direct telecommunications or internet access, and other specific carve-outs.
Restrictions on remittances. In September 2019, the U.S. Treasury Department limited family remittances. Previously, these remittances are now restricted to $1,000 per quarter per Cuban national. The U.S. Treasury Department also prohibited donative remittances (e. remittances to non-family members).

Efforts to stop Venezuelan oil exports to Cuba. Since 2019, the U.S. Treasury Department has imposed sanctions on Cuba’s state-run oil trading company, Cubametales, and has also imposed sanctions on shipping companies that transported Venezuelan oil to Cuba.

Prohibitions of U-Turn transactions. The U.S. Treasury Department restricted the Cuban regime’s access to the U.S. financial system by eliminating authorization for what are commonly known as “U-turn” transactions (e. funds transfers that originate and terminate outside the U.S. where neither the originator nor beneficiary is a person subject to U.S. jurisdiction).
Restricted Access to Leased Commercial Aircraft. In October 2019, the S. Commerce Department restricted Cuba’s access to leased commercial aircraft.
Imposed export restrictions. The U.S. Commerce Department imposed licensing requirements for U.S. exports of telecommunications infrastructure to the Cuban government and for the export of certain donated items to organizations controlled by the Cuban government.

U.S.-Cuba Trade under Biden

It is widely expected that President-Elect Biden will bring the U.S. closer to normalized relations with Cuba, reversing many of the sanctions and regulations imposed by the Trump administration. However, Biden’s eagerness to undo Trump-era Cuba sanctions may be tempered by a complicating factor: the Maduro government. The Cuban government has aligned itself closely with the government of Nicolas Maduro in Venezuela. In fact, Cuban intelligence officers have helped prop up Maduro, allowing his regime to consolidate its grip on power in defiance of demands for free and fair elections. This has been one of the reasons the U.S. Treasury Department has imposed recent sanctions on Cuba. The Biden transition team has indicated that the incoming administration is preparing for potential negotiations with Maduro’s regime. Biden is expected to sanctions relief to Venezuela in exchange for that country holding free and fair elections. It’s possible that as a result of these negotiations, U.S. sanctions on Cuba may be rolled back. Cuban President Miguel Diaz-Canel has also indicated that he is ready to talk to Joe Biden. In a recent address to the Cuban parliament, Diaz-Canel said: “We are willing to discuss any issue, what we are not willing to negotiate and what we will not give in on is the revolution, socialism and our sovereignty.” Biden said in October that the U.S. needed a new Cuba policy, though his team has been firm in condemning efforts by Havana to silence dissidents. With a packed domestic agenda, it’s unclear how quickly Biden will move on implementing his Cuba policy.

U.S.-Cuba Trade Flows

U.S.-Cuban trade flows have been volatile under the Obama and Trump administrations as a result of quickly changing trade and sanctions laws. U.S. exports to Cuba, which were relatively strong under Obama, have waned during the Trump administration (see chart below).

Source: U.S. Census Bureau

Adjusted for Inflation to Base Month November 2020

Due to its proximity and strong cultural ties, Florida is a relatively large exporter to and importer from Cuba (although the trade volumes are minuscule compared to Florida’s top trading partners). The following are the top goods Floridians exported to Cuba in 2019 (the most recent annual data available):

Top Florida Exports to Cuba (2019)

Source: U.S. Census Bureau

Adjusted for Inflation to Base Month November 2020

Meanwhile, U.S. imports from Cuba have been virtually non-existent during much of the Obama administration and the first two years of the Trump administration (see chart below). However, in 2018 and 2019, U.S. imports from Cuba suddenly surged. These imports are almost consist of works of art, collectors’ pieces, and antiques (HS code 97). It’s possible that this surge in art imports is explained by the Trump administration opening the door to restitution claims on art seized by the Cuban government. Furthermore, in 2019, Florida imports from Cuba were minimal and comprised only three categories: (1) artwork, (2) wood products, and (3) a negligible quantity of leather goods (see table below).

Source: U.S. Census Bureau

Adjusted for Inflation to Base Month November 2020

Top Florida Imports from Cuba (2019)

Source: U.S. Census Bureau

Adjusted for Inflation to Base Month November 2020

Contact Us

Diaz Trade law has extensive experience on U.S.-Cuba trade and sanctions matters. If your company is looking to do business with Cuba, Diaz Trade Law can assist you with analyzing the complex legal framework to ensure you comply with the vast U.S. federal government requirements. Diaz Trade Law provides expert analysis of all aspects of U.S. law including the U.S. Treasury Departments, Office of Foreign Assets Control (OFAC) Cuban Assets Control Regulations, and the U.S. Department of Commerce’s, Bureau of Industry and Security (BIS) Export Administration Regulations. Please contact us at info@diaztradelaw.com or 305-456-3830 for more information.

Election 2020: Trump v. Biden on Trade

Jennifer Diaz — Tue, 03 Nov 2020 08:45:49 +0000

Co-Authored by Sharath Patil

Introduction
The 2020 election is one for the record books. At the time of this writing, states have adapted at least in part to mail-in voting systems and voter turnout is booming despite the ongoing public health emergency. There’s another less obvious reason why the 2020 election is unique: it may be the first election in which U.S. trade policy has been a key issue on the debate stage. What does Trump’s record on trade look like? How do Trump and Biden’s trade platforms compare? We will discuss each of these issues, in turn.

Trump’s Record on Trade
Regardless of the merits of Trump’s trade policies, it’s certainly true that Trump has made trade policy a center-stage issue. The administration has enacted policies that counter several decades of neoliberal trade policies. The administration has also questioned fundamental tenets of the global trading system and the function and purpose of the World Trade Organization. Furthermore, Trump has followed through on many trade-related campaign promises by utilizing an array of tools. For example, Trump has:

Pulled out of the Trans-Pacific Partnership (“TPP”)
Imposed Section 301 tariffs on China
Imposed Section 232 tariffs on steel and aluminum imports
Designated China as a currency manipulator
Replaced the North American Free Trade Agreement (“NAFTA”) with the U.S.-Mexico-Canada Free Trade Agreement (“USMCA”)
Appointed “tough” trade negotiators like U.S. Trade Representative (“USTR”) Robert Lighthizer

However, other trade-related pledges have not necessarily been met by the Trump administration:

Reducing the Trade Deficit – Trump campaigned on a promise to quickly reduce the U.S. trade deficit. However, according to most estimates, the U.S. trade deficit has only ballooned under Trump. In fact, the U.S. goods trade deficit with the world has increased 16.2 percent from $735 billion in 2016 (the year before Trump took office) to $854 billion in 2019 (the most recent full-year data available). However, most mainstream economists believe that the U.S. trade deficit is not an important indicator of the economy’s health, and that fixing the U.S. trade deficit should not be a key objective of U.S. trade policy.
Creating a Thriving Manufacturing Sector – The manufacturing sector grew during the first three years of Trump’s administration. In fact, U.S. manufacturing employment grew from 12.38 million workers in Trump’s first month in office to 12.87 million workers in December of 2019. However, the manufacturing sector took a hard hit with the Coronavirus Pandemic, resulting in thousands of jobs being lost. As of September 2020 preliminary data (the latest data available), U.S. manufacturing employment stands at 12.21 million workers, down 0.17 million workers since Trump first took office.

Biden vs. Trump on Trade
The Trump administration has taken a decidedly protectionist and nationalist approach with regards to U.S. trade policy. Promising a re-invigoration of the U.S. economy, the administration has emphasized reducing U.S. trade deficits, increased tariffs, imposed greater trade restrictions, and increased enforcement. Perhaps most importantly, the United States under Trump has started a monumental trade war with China based on concerns about Chinese intellectual property theft and currency manipulation.

Meanwhile, the Democratic Party seems to be split on trade. The Biden campaign aims to balance center-left liberalization attitudes towards trade policy with more liberal labor and environmental concerns. The Biden campaign has pledged to prioritize climate action and emphasize workers’ rights. Biden’s voting record indicates that he is in favor of trade liberalization; however, his campaign has been largely silent on specific trade policies. A potential Biden administration would certainly inherit the ongoing U.S. trade war with China. In fact, Biden’s campaign has not stated whether he would retain the Section 301 tariffs that Trump imposed.

Conclusion
No matter what happens on Election Day, Diaz Trade Law is here for you. We can help your business navigate an increasingly complex trade environment characterized by higher tariffs, greater restrictions, and increased enforcement. If you have questions on any customs or international trade matters, please reach out to us at info@diaztradelaw.com. And don’t forget to vote!