By Lydia Mackey, Policy and Communications Program Assistant at CEDA, and Josefine Petrick, Policy Fellow at the Bourse & Bazaar Foundation and Lead of the Bologna Initiative for Sanctions Relief.
This commentary is a collaboration between CEDA and the Bologna Initiative for Sanctions Relief.
Over the past year, various coalitions have come together to craft reports outlining visions for Cuba’s future. The Harvard Working Group on Cuba’s Future published a lengthy assessment of the “multiple crisis”, calling for amnesty for political prisoners as a first step. The group also backs “Cuba Transformación,” a set of economic reforms proposed by the Cuba Study Group. Meanwhile, some Cubans in the diaspora have developed their own plans to rebuild the island and invest billions of dollars.
These efforts are essential for developing positive visions of Cuba’s future. But much of this thinking jumps from the current political system directly to a post-transition Cuba, paying relatively little attention to how to bridge the gap between the two. Many recommendations would be difficult to implement under current political constraints, barring a major event or abrupt policy reversal.
The reality is that Cuba’s economic landscape is already changing rapidly, and not in the direction these reports envision. U.S. policies are restricting Cuba’s access to traditional sources of fuel and foreign investment while creating new openings for American businesses to supply the private sector and pursue stakes in strategic industries. These developments are beginning to reshape who controls capital, trade, and key economic assets on the island, even as its political system remains unchanged. Without greater transparency, accountability, and a shift in U.S. policy, the deals taking shape today could entrench economic and political power in ways that make a more equitable, democratic transition harder to achieve.
How U.S. Policy Is Reshaping Cuba’s Economic Landscape
More than six decades of the U.S. embargo have created a fundamental asymmetry between the neighbors. As the U.S. is the center of global financial flows, its policies have isolated Cuba. U.S. law and the sanctions regime, including Helms-Burton and the Cuban Assets Control Regulations, prohibit or restrict most U.S. trade and investment in Cuba.
The State Sponsor of Terrorism designation hinders financial transactions and denies Cuba access to international financial institutions like the IMF and the World Bank. Reinforced by Havana’s longstanding restrictions on private investment, this has led to a glaring discrepancy in the capital available for investments. Between 2013 and 2021, Cuba received just an estimated $1.1 billion in foreign direct investment, compared with $23.6 billion in the Dominican Republic over the same period.
The Trump administration has deliberately exacerbated this asymmetry throughout 2026. Since late January, the U.S. has blocked all but one oil shipment to Cuba, intensifying the island’s energy crisis. Around the same time, the U.S. adjusted its sanctions policy to allow U.S. companies to export fuel to Cuba’s private sector.
These exports are already substantial. Nearly $231.7 million worth of fuel from the U.S. reached Cuba between January and August 2026, with August alone accounting for $74.8 million. But the policy’s benefits are unevenly distributed: private businesses and individuals able to purchase fuel gain access to a critical resource, while the broader population continues to endure prolonged blackouts. These exports do not resolve the energy crisis as Cuba’s grid remains controlled by the state.
The administration has also increased pressure on foreign companies operating on the island. On May 1, President Trump issued Executive Order 14404, threatening to freeze assets of foreign companies operating in Cuba. The resulting uncertainty has compounded existing sanctions risks for international businesses. Among the companies that have withdrawn are Spanish hotel groups Meliá, Iberostar, and Barceló, as well as German shipping company Hapag-Lloyd. Visa and Mastercard have also ceased services connected to Cuba.
As foreign companies retreat, American investors are pursuing opportunities in strategic sectors. One example is Cuba’s nickel and cobalt industry, where Canadian company Sherritt has stepped out due to U.S. sanctions as two American investors vie for a stake in the venture. At least one of those investors is a Trump ally who is reportedly responsible for helping Sherritt secure a special license from the U.S. to import materials to restart operations. The stakes extend beyond mining: Sherritt also holds a one-third interest in Energás, which supplies roughly 15% of Cuba's electricity.
Although the humanitarian devastation in Cuba has dominated headlines throughout 2026, it seems that the calculus behind these policies was even more perfidious. The Trump administration has escalated pressure on Cuba to simultaneously isolate and batter the Cuban economy, while positioning the U.S. as the sole available source of relief.
The Risks of Opaque Deals
It is true that deals involving U.S. fuel suppliers and investors in Cuba’s strategic industries may offer a band-aid fix to the humanitarian devastation right now and give some families relief from chronic blackouts. Fuel imports can help keep private businesses running, while new investment could help prevent the further deterioration of Cuba’s essential industries. Benefits may trickle down to employees of projects, revived and new. In a country facing a severe humanitarian crisis, these benefits matter.
But this temporary relief does not automatically accrue equally across society. If fuel exports to the private sector continue to grow and American businesses take over opportunities left open by departing foreign companies, the benefits may accrue disproportionately to Cubans with dollars, capital, and political connections. Most Cubans would continue to struggle to meet basic needs, while a narrow group of business interests gains greater economic leverage.
Beyond these (socio)-economic effects, opaque and unregulated investment would have even more profound consequences for Cuba’s political future. If influential economic actors from the U.S. benefit from arrangements with the current authorities, they may have little incentive to support reforms that threaten those arrangements. As seen in Venezuela, sanctions and military threats coupled with investment deals make for a powerful combination. Analyzing the effects of the recent oil deal that grants the U.S. government concessions to one-fifth of Venezuela’s oil fields, Venezuelan economist Francisco Rodríguez wrote: “When governments use their authority to illegitimately or arbitrarily grant economic power, institutions that restrain that power are unlikely to emerge. That is why reforms to strengthen governance and the rule of law need to be in place before you privatize state assets.”
If only outside capital aligned with the administration’s preferred investment partners establishes a strong foothold before Cubans have a say in the country's future, this may complicate political transition afterward in two ways. First, once political elites are involved in investment deals, foreign investors may have an interest in keeping them in power. This may make any political transition less likely to begin with. Second, even if a political transition were to take place, new political forces would inherit an economic structure that is difficult to change – including a heavy reliance on U.S. exports and fuel. The result could be a recovery that is difficult to regulate, diversify, or redirect in the public interest.
The argument is not that Cuba should reject foreign investment. The island urgently needs capital, trade, and access to energy. Rather, deals made under conditions of extreme economic pressure, without transparency or meaningful public accountability, risk determining Cuba’s future before Cubans can do so themselves.
Engagement Should Be on Transparent Terms
Washington should not use Cuba’s economic crisis to dictate who gets access to the island’s resources or who benefits from its recovery. If major deals are struck without oversight, the U.S. risks helping establish a private economic elite whose interests are intertwined with a political elite that remains in power.
Congress should increase oversight of U.S. companies doing business in Cuba and require greater transparency around ownership, financing, joint ventures, and ultimate beneficiaries. It should examine whether politically connected investors are positioned to profit from sanctions-driven market changes and ensure that economic engagement does not facilitate corruption or the capture of Cuban assets by well-connected actors in the U.S. These safeguards are particularly important in strategic sectors such as energy and mining, where investment decisions can have lasting consequences for the wider economy.
The U.S. should, however, address the policies that deepen Cuba’s economic isolation. The Harvard Working Group is correct to say that Cuba should grant general amnesty to political prisoners. The U.S. should also end its de facto blockade on oil shipments to ease the humanitarian crisis and reduce the island’s dependence on selectively authorized U.S. suppliers. The proposals now being developed for Cuba’s future are valuable exercises in identifying what the country needs. But realizing that future requires a credible path from the current crisis to a more open and accountable economy.
That path should include diplomatic engagement with a range of Cuban actors. In discussions with state officials, Washington should press for the implementation of recent reform commitments and identify opportunities to support meaningful economic change. It should engage Cuban civil society, independent entrepreneurs, and diaspora communities, including Cuban-American business interests, so that economic decisions reflect a wider range of perspectives and interests.
Ultimately, the U.S. must remove the barriers that contribute to Cuba’s economic isolation and ease its sanctions regime. But opening channels for trade and investment is not enough. Economic ties must be transparent, diversified, and accountable, with safeguards against corruption and undue political influence.
Cuba needs investment and access to capital. Its people also need the opportunity to determine how those resources are used and who benefits from them. The goal of U.S. policy should not be to prescribe Cuba’s future or exploit the crisis to secure economic advantages. It should be to ensure that American actions do not foreclose the possibility of Cubans shaping that future themselves.
