Washington began by snubbing Cuban sugar imports, which eventually led to a nearly full ban on all Cuban imports and included "stringent travel restrictions" (Renwick, 2016).
In 1961, the United States severed all diplomatic ties with Cuba and began planning ways to overthrow Castro and his regime. The Bay of Pigs invasion, a CIA-backed attempt to tear down Cuba's government, was carried out in 1961. The attempt failed, and led to Cuba allowing the Soviet Union to build secret nuclear missile sites on the island (Renwick, 2016). In October of 1962, the U.S. learned of this plan, which led to the Cuban Missile Crisis and began a 14-day standoff which ended with the dismantling of the missile sites, as long as the U.S. agreed not to invade Cuba.
The U.S. - Cuba trade embargo was strengthened in 1992 with the Cuba Democracy Act, and again in 1996 with the Helms-Burton Act. These acts also stated that the embargo would not be lifted until Cuba transitions to a democratic form of government without the Castro family. Cuba's government estimates that the 50 year trade embargo has resulted in a loss of around $1.126 trillion (Renwick, 2016).
On December 17, 2014, following a prisoner swap of U.S. prisoners on Cuban soil and vice-versa, Barrack Obama and Raul Castro agreed to fully restore diplomatic ties for the first time in 50 years. The United States also lessened restrictions on banking, travel, and remittances, while Cuba released 53 more prisoners who were formerly declared political dissidents by the United States (Renwick, 2016). On July 20, 2015, embassies of the two respective countries were re-opened in each nation's capital, officially restoring diplomatic ties.
In March of 2016, when president Obama set foot in Havana as the first president to do so since Calvin Coolidge in 1928, he supported his plan to lift the embargo, but called for further reforms to the political system in Cuba (Renwick, 2016). In his keynote address, he stated that, "Even if we lifted the embargo tomorrow, Cubans would not realize their potential without continued change here in Cuba."
In January 2015, the U.S. enacted lighter travel and trade regulations that allowed U.S. citizens to travel to Cuba for certain purposes without first being granted a government license (Renwick, 2016). Airlines were permitted to commercially fly in and out of Cuba, and citizens could spend U.S. dollars on Cuban soil.
U.S. companies can invest in small cuban businesses, citizens can use U.S. credit or debit cards, banks may now facilitate authorized transactions, and, among other things, U.S. insurance companies can cover health, life, and travel insurance for people living in or visiting Cuba (Renwick, 2016).
These new trade agreements will have a positive affect on the economy of both nations. We need Cuban goods, and they need ours. Although the U.S. was not affected as much by the embargo, since they are a global powerhouse and have much more opportunities to trade, we may still benefit from these new trade circumstances.
Cubans are definitely benefiting from these new agreements. U.S. citizens can invest in small Cuban businesses and are purchasing more foreign goods from Cuba (Renwick, 2016). Since 2007, America has already become Cuba's 5th-largest trade partner. CFR's Jennifer Harris suggests that American agriculture and telecommunications stand to benefit the most from the new trade regime (Renwick, 2016).
Altogether, the increased trade and lighter outside restrictions between the U.S. and Cuba has been beneficial to both nation's economies, and will only continue to grow as imports and exports increase, and prior political shortcomings between the two nations are abolished.
Resources:
Renwick, D., Lee, B., & McBride, J. (2016, March 24). U.S.- Cuba Relations. Retrieved April 20, 2016, from http://www.cfr.org/cuba/us-cuba-relations/p11113
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