US-Cuba Trade Relations

In the years following World War 2 there was much speculation centered on the political rivalry held between the Democratic US and the Communist Soviet union. Both of these countries wanted to implement their political ideas to unstable nations to create a larger contingency of communist and democratic nations, this would eventually turn into what we know today as the cold war. Most of the countries that were being influenced by the US and the USSR were in the European and Middle East region but Cuba was also a country that was unstable. The US put Fulgencio Batista into power to try and establish a democratic government but in 1959 Fidel Castro, a communist idealist, overthrew Batista. This led to the USSR opening up trade and political diplomacy with Cuba. The US saw Cuba as a threat and decided to cut tie with the country. As the relations and trade between Cuba and the USSR increased, the US set a full on economic embargo on Cuba in hopes to cripple their economy. In 1961 an event known as the Cuban missile crisis happened, this was a conflict involving nuclear missiles being sent to Cuba by the USSR leaving the US open to a close and effective nuclear strike. This crisis basically vilified Cuba as a communist nation that was an enemy of the state.

The cold war ended in 1991 but Cuba was still cut off from American diplomacy. In 1992 the US said that they would re-open trade with Cuba if they were to become a democratic state. As seeing that this wasn't going to happen the US and Cuba remained opposed to trade with each other. In efforts to relive tension between the two states, the US exported goods to Cuba such as produce (i.e. agricultural goods) and medical supplies that were needed within the country. This one sided export of goods left the US at a 1.1.26 trillion dollar deficit. Barrack Obama’s first term as president (2008-2012) had focus on bettering the foreign relations between these two countries, and in 2014 Barrack Obama was able to re-open diplomatic relations with Cuba. Fidel Castro, who had since died, was succeeded by Raul Castro. Raul and Barrack decided that relations between the two states could offer help with the human rights issues that had come about within the country. Since the re-opening of relations in 2014 the US has risen to become Cuba’s 5th largest trading partner, still trading agricultural goods but also creating a large trade base with telecommunications. 

Both the US and Cuba suffered trade losses around 1 trillion dollars because of the embargo and realized that this was hurting both economies. Both countries recognize the problem with restrictions on their trade, even today. The net export and imports that countries have gathered will only decrease with these trade restrictions. This is still an ongoing debate within congress as to whether or not they can forget the past and re-open full tare with Cuba. The embargo that was placed on Cuba hurt them more than it hurt the US as seeing that the US has a larger economy and has a more stable economy. If the US and Cuba were to open up trade again both imports and exports of both countries would rise which would in turn strengthen both economies. This is important to both countries, but more so for Cuba. If the US and Cuba can settle their differences and begin trading with each other with no restrictions this would not only show diplomatic improvement but also economic improvement. 

Bibliography:

https://www.irs.gov/uac/The-American-Recovery-and-Reinvestment-Act-of-2009:-Information-Center

http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=expansionary+fiscal+policy