United States and Cuba Trade Embargo

Dylan Stein

United States and Cuba Trade Embargo

            The negative history between the U.S. and Cuba began in 1959 when Fidel Castro and his group of rebels took over the Cuban capital of Havana and dethroned the former head of government. As a result of this, Cuba began to nationalize U.S. owned property, increase taxes on American imports, and increased trade with the Soviet Union. The United States struck back at the Cubans by cutting off all nearly all of their exports to Cuba and all of the Cubans imports of sugar leading to a decision to put into affect a full economic embargo. The Cuban government estimated that this embargo would cost their government 1.126 trillion dollars.

            The loss of 1.126 trillion dollars shows how large of an impact an economic embargo can have on a country if it were to happen. Embargos such as this one show how large of an impact it can have on different aspects of the economy and different economic variables. By not trading with Cuba at all, this embargo cost them a substantial amount of money that they would have had if the U.S. were to import goods from them like sugar. This would also cost the U.S. money because we weren’t allowed to trade with Cuba at all so no profits were being made. United States Citizens were also not allowed to travel to Cuba due to these restrictions which cause an economic impact to happen due to the decrease of goods coming from Cuba to the United States. The same goes for Cubans not being able to travel to the United States and they would have to settle for inferior goods compared to the United States’ goods which were remarked as superior goods. This would eventually hurt them in the long run as well as the short run due to them not being as civilized as other countries might have been without the goods from the United States that other countries are getting. Net exports can also be affected by a theoretical economic embargo as well. Cuba’s top import is Mineral Fuels, including of course, oil and other fuel products according to SAS and the UN comtrade. Cuba’s top export is Nickel and products thereof, but the amount of money it will cost them to import Oil outweighs the amount of money it costs fro other countries to buy their Nickel, which causes a deficit in money again. This causes Net exports of Cuba to decrease because of this money problem with there imports and exports. In smaller countries these affects from a trade embargo are seen as well since they have to import more then they can export and this will cause a decrease in Net exports there as well. For Net Capital Outflow this affect would happen from an economic embargo as well since the country would invest more then they are being invested into. Overall, an economic embargo can cause a large amount of trouble for a smaller countries economy then it would do good.

Cites: Renwick, Danielle. "U.S. Cuba Relations." Council on Foreign Relations. Council on Foreign Relations, n.d. Web. 26 Apr. 2016.