An economic impact analysis by Engage Cuba claims that airlines and cruise lines will lose $3.5 billion and over 10,000 jobs over the course of President Trump’s first term if he undoes all the changes made to U.S.-Cuba policy by former President Obama. Trump is expected to amend the changes Obama began instating from December 2014, but the full scope of his plans for the island have yet to be seen.
The Washington, D.C.-based nonprofit’s report assumes the worst-case scenario in which the Trump administration rolls back the entire U.S. regulatory regime toward Cuba, including legalized travel for U.S. citizens and residents, licenses for certain exports, expanded remittances, and the end of the so-called “wet foot, dry foot” immigration policy.
Starting from December 17, 2014. the Obama administration issued six rounds of changes that eased trade and travel restrictions to Cuba. These changes have reportedly contributed to significant economic activity in the U.S., particularly in the manufacturing, travel, and tourism sectors.
The changes also eliminated the “wet foot, dry foot” policy, which granted permanent residency to Cubans fleeing the Castro regime. Under the controversial policy Cuban immigrants could enter the U.S. without a visa and apply for permanent residency after one year.
Engage Cuba, a nonprofit, estimates that it would cost U.S. businesses and taxpayers $6.6 billion and almost 12,300 jobs over the course of President Trump’s first term.
“Rolling back the current U.S. policy on Cuba could cost U.S. businesses and taxpayers $6.6 billion over the course of the President’s first term and affect 12,295 jobs across the country,“ the report claims. “Communities most reliant on the manufacturing, tourism, and shipping industries would be disproportionately affected, especially Gulf states with deep-water ports and cruise terminals.”
50 percent of the revenue and 80 percent of the jobs lost would be in the travel sector, which means airlines and cruise lines will take the biggest hit. Cities like Miami, Fort Lauderdale, and Tampa will suffer substantial losses because much of the airline and cruise business originates from South Florida’s ports and airports.
Remittances leaving the U.S. would take the second-biggest hit with a loss of $1.2 billion over four years. Remittances to Cuba generate up to $320 million for U.S. money transfer companies annually and help support almost 800 jobs.
Using estimates from the Congressional Budget Office, reinstating “wet foot, dry foot” would cost American taxpayers $953 million after four years. The policy entitled Cuban immigrants several costly federal benefits, including retirement, healthcare, social security, education, research, and tax benefits.
It is unclear how many, if any, of the report’s findings will come true. It all hinges on the changes the Trump administrations chooses to make to the current policy. The White House is expected to announce the changes in the coming weeks.
“The recent amendments to U.S. Cuba regulations have catalyzed economic activity across the nation. A reversal of these changes would result in commercial slowdown and loss of thousands of jobs, even before induced effects are taken into account,” the report concludes. “These effects would be especially prominent in manufacturing and coastal states. Maintaining commercial and cultural ties to Cuba is a win for U.S. businesses, security, research initiatives, and economic development.”