Cuba and Venezuela in Trump’s Cross-Hairs

Ambassador Curtis A. Ward

Cuba and Venezuela in Trump’s Cross-Hairs

Ambassador Curtis A. Ward

Characterizing Cuba and Venezuela as “communist and socialist dictatorships,” against which sanctions have been imposed, in his State of the Union address 30 January 2018 should come as no surprise to anyone tracking President Donald Trump’s prior statements and actions towards these two countries. President Trump’s targeting of Cuba and Venezuela carries out promises he made repeatedly to supporters during his campaign for the presidency in 2016. His anti-Cuba stance helped him win Florida, in particular with Cuban-American supporters.  The drumbeat within the Trump administration on U.S.-Cuba policy also represents a determination by Trump to reverse actions taken by President Barack Obama’s in his rapprochement with Cuba. Trump’s policy towards Venezuela has been consistent with his declaration that all measures, including the use of force, are on the table to effect changes to the Nicolás Maduro regime.

Trump administration’s increase in sanctions on Venezuela, and re-imposing restrictions on Cuban travel and trade have chilling effects on both countries’ economies, with far greater effects expected on Venezuela’s. Cuba and Venezuela are small, economically vulnerable countries compared to the power and influence of the U.S. Government behemoth. Venezuela’s vulnerability is exacerbated by sanctions imposed on Maduro’s regime by Canada and the European Union as well as domestic factors.

In June 2017, President Trump signed a National Security Presidential Memorandum (NSPM) Strengthening the Policy of the United States Toward Cuba, which took effect November 9, 2017, re-imposing travel and certain trade restrictions on Cuba that had been removed by President Barack Obama.  While signing the NSPM before a cheering Cuban-American audience in Miami on June 17 2017, President Trump made clear his principal objectives for these new U.S. sanctions. He said: “We will very strongly restrict American dollars flowing to the military, security and intelligence services that are the core of Castro regime.  They will be restricted.  We will enforce the ban on tourism.  We will enforce the embargo.”

Implementing agencies of the NSPM, Departments of the Treasury and Commerce issued amendments to the Cuban Assets Control Regulations and Export Administration Regulations, respectively, and the Department of State expanded the list of designated individuals and entities with which U.S. citizens are prohibited from doing business. Re-imposition of these sanctions against Cuba also sends a warning to Cuba on further measures to come depending how the Trump administration perceives transfer of power from Raul Castro to a successor expected later this year. Further reversal of President Obama’s U.S.-Cuba relations is expected and Latin American and Caribbean (LAC) countries are being urged or coerced to support U.S. actions.

Sanctions imposed on Venezuela have targeted Maduro and close associates and supporters of his regime with travel and financial sanctions which prohibit entry into the U.S. of designated individuals, freezing of their assets found in U.S. jurisdiction, and prohibits any American citizen (individual or corporate) from doing business with any of the designated individuals and entities.  The Trump administration has significantly expanded the list of designated individuals. On August 27, 2017, President Trump signed Executive Order (E.O.) 13808 imposing sanctions against Petroleos de Venezuela, S.A. (PdVSA), a government-owned oil company, prohibiting or restricting financial transactions, including debt financing or refinancing, with the company.  U.S. financial institutions hold hundreds of millions of dollars in PdVSA debt financing and these new sanctions against PdVSA will directly impact on Venezuela’s economy.

The next steps for the Trump administration are to get broad support for sanctions against Venezuela by LAC countries to further isolate Venezuela and to pressure the Cuban government to make changes compatible with Trump’s policies. Political and economic pressure on Cuba and Venezuela are Trump’s ultimate objectives and governments of LAC region during meetings with Tillerson will be urged to support the U.S. While there is near unanimity in the hemisphere for political and economic changes in Venezuela and the policies of Maduro’s regime with regard to democracy, rule of law, and protection of human rights, the region is divided on how such changes may be effected. Many countries oppose the heavy-handed approach of the Trump administration. There will be no support for reversal of President Obama’s policies on Cuba.

Secretary Rex Tillerson’s selection of the five countries in the hemisphere (Mexico, Peru, Columbia, Argentina, and Jamaica) for his first visit to the region as Secretary is strategically selected. Their current posture and relationships with Cuba and Venezuela and their respective roles in the region are important factors. Isolating and pressuring Cuba and Venezuela was confirmed in Secretary Tillerson’s speech at the University of Texas on day one of his trip to the LAC region. Noting the important timing of his trip for the Western Hemisphere, Secretary Tillerson said it “is a priority for the United States for reasons other than simply our geographic proximity.”

Citing President John Kennedy’s Alliance for Progress, “to eliminate tyranny from among a hemisphere in which it has no rightful place” he said that, “Today we share these same goals … to eliminate tyranny and to further the cause of economic and political freedom throughout our hemisphere. As 2018 begins, we have an historic opportunity to do just that.”  In this context he identified what he referred to as the “three pillars of engagement to further the cause of freedom throughout our region in 2018 and beyond: economic growth, security, and democratic governance.”  While all three elements of U.S. policy are important to Latin America and the Caribbean, and potentially of mutual benefit both to the U.S. and the region, it is uncertain how these will be prioritized and actualized under the Trump administration.

Using harsh terms in reference to the “corrupt and hostile regime” of Venezuela’s Nicolás Maduro, Tillerson said the U.S. “will continue to pressure the regime to return to the democratic process….”  He blamed the Maduro regime for the suffering of the Venezuelan people and said it “must be held to account.”

One of the undercurrents of Tillerson’s trip is to express Trump administration’s deep concerns for the increasing Chinese economic presence in the Western Hemisphere and Russia’s increased sale of arms and military equipment to certain states in Latin America. Tillerson referred to those countries purchasing Russian military hardware as “unfriendly regimes which do not share or respect democratic values.” In a warning to LAC countries, Tillerson referred to China and Russia as “potential predatory actors.”

He characterized China as offering “an attractive path to development” which “in reality, often involves trading short-term gains for long-term dependency.” He noted that “China’s offer always comes at a price” which he described as “state-led investments, carried out by imported Chinese labor, onerous loans, and unsustainable debts.” He said the China model extracts precious resources to feed its economy. In reference to China, Tillerson warned that Latin America does not need “new imperial powers that seek only to benefit their people.”

The agenda for discussion with leaders of Latin America and Jamaica’s Prime Minister Andrew Holness “economic growth, security, and democratic governance” will include Russia’s and China’s presence in the region. U.S. concerns regarding increasing economic relations between China, Jamaica and other Caribbean countries will be on Tillerson’s Kingston agenda.

© 2018 Curtis A. Ward/The Ward Post

Please follow me on Facebook and Twitter

#TheWardPost