As U.S. Pressure Mounts, Can Cuba’s Economic Reforms Succeed?

While the Trump administration’s increased interest in Cuba is not new, reporting this week suggests that these efforts have covertly expanded in recent months. A new report from POLITICO indicated that the US has increased its intelligence presence on the island, while The New York Times reported that the Central Intelligence Agency (CIA) has created a Cuba task force, allowing the agency to divert additional resources to operations on the island. As The New York Times noted, this is not the first time the U.S. government has established a Cuba task force; a similar project was undertaken in 1960 in an effort to support the Bay of Pigs invasion.

Reportedly, the goal of the new task force is to encourage fractures among Cuban officials in an effort to replace them with those more friendly to the U.S. government, rather than train an opposition force as was done in 1960. While increased intelligence activity does not necessarily indicate imminent military action, it can provide the capabilities and information needed to support a range of options, including military operations. 

At the same time, a new Axios interview with Secretary of State Marco Rubio suggests that the administration’s immediate strategy is one of sustained economic and political pressure rather than a publicly announced timetable for military action. Secretary Rubio described an effort to eliminate Cuba’s remaining economic “escape valves” and emphasized the importance of patience and persistence. He said the pressure would continue throughout the remaining two and a half years of the administration, with additional sanctions expected.

Secretary Rubio’s comments suggest that the administration currently sees prolonged economic pressure, international isolation, and the cultivation of divisions within Cuba’s government as its principal tools for producing political change. The apparent objective is to prevent Havana from waiting out the administration or finding new sources of economic relief while preserving uncertainty about whether more direct action could follow.

Despite mounting threats, Cuba’s government continues to show little indication that it is prepared to meet Washington’s demands. This was reflected in an interview last week with Cuba’s Deputy Foreign Minister, Carlos Fernández de Cossío, who told The New York Times that Cuba’s strategy is to implement economic reforms and open the country to foreign investment, even suggesting that President Trump himself could invest in Cuba. But he acknowledged an uncomfortable reality: if the US is determined to take military action against Cuba, there is very little Cuba’s government can do to prevent it.

This combination of escalating external pressure, continued resistance to political change, and ongoing domestic hardship raises broader questions about the viability of the economic reforms announced by Havana in June. The government is attempting to tackle longstanding structural weaknesses in the economy at a moment when access to international markets, investment, and fuel remains increasingly constrained, making the prospects for successful reform more uncertain.

A new analysis published for CEDA by Cuban economist Ricardo González titled Cuban Economic Reform Amid Isolation: Four Scenarios examines this tension. González argues that the 176 measures announced by Cuba’s government in June represent a significant departure from previous reform efforts, addressing fundamental features of the country’s economic model, including state ownership, incentives, private-sector activity, and the autonomy of state-owned enterprises. However, many of these reforms depend on precisely the resources that Cuba is increasingly struggling to access: foreign capital, technology, imports, financing, and international markets.

González outlines four possible trajectories for the reform process. Under paralysis and reversal, worsening economic conditions and political resistance could prevent the reforms from being implemented or lead the government to retreat from them. Under partial reform amid continued isolation, Havana could implement some changes while remaining constrained by limited access to international capital and markets. A third scenario involves sustaining reform through a shift toward alternative international partners, with Cuba deepening its economic relationships outside the U.S.-led financial and commercial system. The fourth scenario would be accelerated reform following an easing of tensions with the US, which would give Cuba greater access to investment, trade, technology, and financing.

González considers a combination of partial reform and the search for alternative international partners the most likely trajectory under current conditions. This could help stabilize the economy and prevent further deterioration, but would likely fall short of the scale of transformation necessary to address Cuba’s deeper economic problems. The scenarios demonstrate that the success of Cuba’s reform agenda will depend not only on Havana’s willingness or ability to implement its own measures, but also on the external environment in which those reforms take place.

That external environment is becoming increasingly difficult. The new sanctions designations announced this week, the reported expansion of U.S. intelligence operations, and Secretary Rubio’s description of a patient campaign to close Cuba’s remaining economic “escape valves” indicate that the administration intends to prevent Havana from finding sufficient external relief to stabilize the economy. All of this could further restrict the capital, technology, trade, and investment needed to make the June reforms viable. At the same time, Cuba has struggled to secure meaningful economic support from many of its traditional partners, including Mexico and Russia. While more limited assistance from countries such as Uruguay, Spain, Brazil, Vietnam, and others may provide a temporary buffer, it is unlikely to offset these mounting pressures, leaving Cuba increasingly isolated economically and more dependent on a shrinking circle of international partners.

González’s analysis therefore offers an important lens for understanding the stakes of the current moment. The question is not simply whether Cuba will reform, but whether meaningful economic transformation is possible while the country remains increasingly disconnected from the international system and whether either side has an incentive to alter a trajectory that is becoming progressively more difficult to reverse.

U.S.-CUBA NEWS

US Expands Sanctions Targeting Cuba’s Military and Defense Sector 

On August 6, the U.S. Office of Foreign Assets Control (OFAC) announced the designation of five Cuban entities and eight individuals pursuant to President Donald Trump’s May 1 executive order. The designations target Cuba’s defense sector, military equipment procurement and maintenance, and cooperation with Russia and China. The announcement follows the State Department’s July 20 report, which accused Cuba of orchestrating the alleged rise of left-wing groups in the US and examined Cuba’s relationships with Russia and China, including the provision of military equipment, surveillance technologies, and other security capabilities.

The five entities include TECNOIMPORT and DUNA S.A., which are involved in importing military-related equipment from China and Russia; the Union of Military Industries (UIM) and the Yuri Gagarin Military Industrial Enterprise, which produce, repair, and maintain military equipment and aircraft; and TECNOTEX, a Grupo de Administración Empresarial, S.A. (GAESA) subsidiary involved in importing and exporting equipment, technology, construction materials, and other goods for Cuba’s defense and security sectors.

The eight individuals include Roberto Jesús Viciana Mousset and Heriberto Sánchez Alleyne, the directors general of UIM and TECNOIMPORT; Álvaro Victoriano López Miera and Roberto Legra Sotolongo, senior MINFAR officials serving as Minister and Chief of the Revolutionary Armed Forces (FAR) General Staff and First Deputy Minister, respectively; and José Antonio Remón Rodríguez, Oscar Enrique Biosca Gallego, Mónica Milian Gómez, and Waldo Pérez Cortés, MINFAR officials responsible for foreign relations, economic affairs, and military cooperation with Russia and China.

As a result of the designations, property and interests in property of the designated individuals and entities in the US or in the possession or control of U.S. persons are blocked. U.S. persons are prohibited from engaging in transactions involving designated or otherwise blocked persons unless authorized or exempted by OFAC. The May 1 executive order also creates sanctions risks for foreign persons that engage in transactions with designated persons or operate in specified sectors of the Cuban economy.

This is the fifth round of sanctions designations pursuant to the May 1 executive order, following the most recent round on July 23. 

Alongside the new designations, OFAC released a new Frequently Asked Questions stating that the provision of humanitarian assistance would not face penalties even when provided through a previously sanctioned entity or an entity more than 50 percent owned by a sanctioned individual. While the clarification is intended to protect the delivery of food, medicine, and other humanitarian assistance, the broader impact of sanctions can still affect the availability of foreign investment, business activity, and capital in Cuba. 

In practice, humanitarian exemptions are often undermined by overcompliance, as banks, businesses, and other private actors avoid transactions they perceive as legally or reputationally risky, even when permitted under sanctions regulations. This phenomenon can significantly impede humanitarian operations and adversely affect the human rights of millions of people living under sanctions. These constraints can make it more difficult to sustain the infrastructure, fuel, and other resources needed to deliver assistance effectively, potentially leaving the most vulnerable populations without adequate access to aid.

US Working on Deal to Deport Cubans to Uruguay

On July 29, it was reported that the US has been conversing with Uruguay about deporting migrants. Although not stated directly by the State Department, multiple U.S. officials have noted that Cuban migrants would be the main group targeted by the agreement. Uruguayan government officials refuted this sentiment, stating that the discussions are not limited to just Cubans and that they have remained impartial. During an interview, President Yamandu Orsi stated that “nothing is closed” regarding the deal, pointing to many other Latin American countries who have established similar proposals with the Trump administration.

The discussion occurred over many months, and the two governments are also examining a possible reunification program for deportees who have families in Uruguay. Per the agreement, Uruguay would establish a streamlined process to regularize migrants, enabling them to enter the local workforce immediately. This would not only reduce the number of current asylum cases in the country, but also allow migrants to receive social services.

The Trump administration declined to speak on the possible deal, instead emphasizing that fulfilling their immigration goals is a “top priority.” Alternatively, Uruguay’s government has emphasized its need for labor due to its aging population, declining birth rate, and small population. Fernando Pereira, the President of Broad Front (Frente Amplio), Uruguay’s governing left-wing coalition, explained that the possibility of receiving deported migrants from the US deviates from Uruguay’s past immigration framework, which was characterized by infrequent deportations and flexible visa requirements. As CEDA has previously covered, Uruguay totaled 26,626 Cuban asylum applications in 2025, the third largest of any Latin American country. 

As of now, there is no official, signed third-country deportation deal between the US and Uruguay. However, a number of countries in the region have signed third-country deportation agreements with the US, including: Ecuador, Mexico, Paraguay, Costa Rica, Panama, Belize, El Salvador, Guatemala, and Guyana. These agreements enabled the US to deport at least 3,757 Cuban migrants to third countries in 2025.

Congress Issues Subpoenas Against Three Nonprofit Groups

On July 23, Republicans on the House Ways and Means Committee issued subpoenas demanding financial documents, internal communications, and organizational records from three organizations with alleged “left-wing views.” The groups have been accused of colluding with the Party of Socialism and Liberation (PSL), and receiving $40 million dollars of funding from Neville Roy Singham, a multi-millionaire with an alleged history of funding left-leaning nonprofits and media groups.

The three organizations included the People’s Forum, a political and cultural center focused on grassroots activism, and BreakThrough News, an independent media organization that publishes commentary on social justice movements. It also included Tricontinental: Institute for Social Research, an international institute focused on anti-imperialistic research. Representative Jason Smith (MO-08) mentioned that all three organizations are currently under review for tax exemptions they received through their funding channels. They were given until August 7 to comply.

Republicans in the House Ways and Means Committee previously attempted to demand these documents from the People’s Forum in September 2025, and from Breakthrough News and Tricontinental in February 2026, but did not succeed. In response to the subpoenas, The People’s Forum issued a statement, saying that these are targeted attacks due to their affiliation with work related to Palestine, U.S. Immigration and Customs Enforcement, and Cuba.

IN CUBA

New Decree Expands Private Sector Opportunities

On July 28, Cuba’s government passed a regulation easing restrictions on the private sector, including economic entry opportunities for private micro, small, and medium-sized enterprises (MSMEs), self-employed workers, and non-agricultural cooperatives. This policy action forms part of Cuba’s June 2026 reform package, which focused on bolstering private sector investment and decentralizing the economy. The decree went into effect on August 4, and the Council of Ministers is required to review it every two years.

It will replace Decree 107/2026, which detailed Cuba’s previous system for engaging in private-sector activity. Companies were previously provided an extensive list of 125 unauthorized activities and were only permitted to carry out those that were excluded. Now, the new framework catalogs permissible activities under four regulatory categories: activities prohibited by non-state entities; activities reserved for Cuba’s State; activities impermissible for self-employed workers but allowed for other private companies; and conditional activities pending approvals, certifications, and concessions from Cuba's government. In addition, it removes restrictions on 46 activities and modifies the authorizations and restrictions of 35 others.

This sector-specific framework maintains an extensive list of activities still reserved for Cuba’s State, while incorporating rules tailored to economic actors and their associated risks. It operates under ‘conditional access’, where opportunities to expand in these sectors are accompanied by strict sector-specific authorizations by Cuba’s government. It does not permit foreign investors to form direct partnerships with any private sector entities.

Private companies, MSMEs, and non-agricultural cooperatives may now participate in economic activities related to small-scale mining, renewable energy, vehicle manufacturing, decontamination management, and more. Although all healthcare, including primary care, specialized surgeries, and advanced treatments, remains reserved for the state, private enterprises are allowed more flexibility in providing pharmaceutical services. This may help address the growing shortage of medicine on the island.

While the proposal includes the loosening of restrictions related to medical care, transportation, and energy, Cuba’s government maintains tight restrictions on education and the media. The Committee to Protect Journalists (CPJ) has raised questions regarding the decree, noting that the only concession it provides to media is the authorization of cinematic production services, with no mention of independent media. They argue that Cuba’s government will continue to hold tight to its media restrictions. 

Sixth Islandwide Blackout Strikes Cuba

On August 2, Cuba suffered another islandwide blackout as the electric grid suffered a “total disconnection” across the entirety of the island, according to Cuba’s National Electric Union. While officials immediately began working to restore power, severe thunderstorms on August 3 disrupted efforts to remedy the electricity crisis, affecting the few generators officials had managed to get operational. Reporters have noted that the successive power malfunctions highlight the island’s aging, underinvested infrastructure, as residents struggle with a U.S.-imposed fuel shortage and rationed supplies. Following three blackouts in July, this marks Cuba's sixth nationwide blackout in 2026.

Independent Journalist Ordered to Leave Cuba

On July 27, an independent Cuban journalist, José Antonio López Piña, was taken in for questioning for alleged subversion, being given two months to leave Cuba, lest he face a prison sentence of up to ten years. The officers specified that his work for independent media outlets goes against Cuba’s constitutional order, framing him as a ‘mercenary’ who supported ‘foreign powers’ against Cuba’s government. The charges follow an altercation on July 21, when five police officers attacked López Piña for filming in the streets. He was beaten, and his cell phone was destroyed.

After being released, López Piña was banned from his home municipality of Santiago de Cuba. This is one of many charges against the journalist, who has been arrested for participating in protests and distributing photographs of civil unrest in 2019.

Raúl Castro Absent from Commemorative Rally

On July 26, a rally was held in Pinar del Río, Cuba, commemorating the 73rd anniversary of the attacks on the Moncada and Carlos Manuel de Céspedes barracks during the Cuban revolution. Although he has consistently attended the rally for the last three decades, Cuba’s former President Raúl Castro was not in attendance this year, with no explanation provided regarding his absence.

In his absence, President Miguel Díaz-Canel read a message from Raúl Castro at the rally. President Díaz-Canel then refuted the State Department's report on alleged Cuban collusion with leftist groups in the US, accusing the Trump administration of following a “genocidal policy” similar to that of the National Socialist German Workers' Party. Referencing U.S. pressure on the island as a campaign of “maximum strangulation”, he called for an end to the U.S. oil embargo and related sanctions.

CUBA'S FOREIGN RELATIONS

Colombia Severs Ties and Petro Makes a Final Visit to Cuba

On July 26, Colombia’s president-elect, Abelardo de la Espriella, announced that he will be ending all diplomatic ties with Cuba once he takes office. The announcement was accompanied by the planned closing of 15 consulates and 14 embassies, including the Colombian embassy in Havana. Referencing Nicaragua and Cuba, he stated that Colombia’s government will have “no ties whatsoever to tyrannies.” In response, Cuba’s Ministry of Foreign Affairs characterized de la Espriella’s decision as “an act of subordination” in support of the Trump administration’s “policy of aggression”, explaining that the decision goes against the historic friendship previously shared between Colombia and Cuba.’

Colombia currently houses embassies for 19 Latin American nations. If de la Espriella’s plan is carried out, this number will be reduced to 15, eliminating Barbados, Cuba, Haiti, and Nicaragua. The closing of the Cuban embassy is expected to halt citizen services, sever direct communication between the two nations, and possibly affect future trade agreements.

Meanwhile, on July 31, outgoing President Gustavo Petro traveled to Cuba, marking his final international trip before Colombia’s transition of power. Upon arriving for his two-day visit, President Petro was welcomed by President Miguel Díaz-Canel. President Petro’s visit to Cuba comes after the cancellation of his trip to the US earlier in the month, where he was scheduled to participate in discussions with the Organization of American States (OAS) and the United Nations.

Brazilian Government Investigating Trafficking of Cubans

On July 23, the Federal Highway Police of Brazil launched “Operation Trapaceiros”, an operation that feeds into a broader effort of targeted investigations focused on dismantling the criminal networks that facilitate irregular Cuban migration from Guyana to Brazil. Officials completed two search and seizure warrants in Boa Vista, with investigations focusing on the border between Lethem, Guyana and Roraima, Brazil. Brazilian authorities have rescued 297 Cuban migrants at this border crossing since June 2024, with Brazil recording over 41,900 asylum claims in 2025.

The operation’s origins go back to July 2022, when two men were arrested for smuggling Cubans into the border, and after reviewing their cell phones, were found to have ties to a broader criminal network. Since then, multiple operations have been carried out, including Operation Malecón in February, which dismantled a criminal network in Boa Vista, and Operation Conexão Norte, which led to the rescue of 189 Cuban migrants. This past June, the Federal Highway Police rescued 108 Cuban migrants from smugglers at the Guyana border, including elderly people, a pregnant woman, and at least ten children. Between 2024 and June 2026 alone, it is estimated that the Federal Highway Police rescued 297 migrants in Roraima.

New Immigration Pathway for Cubans in the Cayman Islands

The Cayman Islands government has proposed an initiative to provide citizenship status to an estimated 300 Cuban-Caymanian descendants. The proposal would include a working group to provide legal support to impacted families, tools to trace Cayman-Cuban ancestry, and possible solutions towards providing the group with status. Officials have affirmed that the proposal focuses solely on those with Cayman-Cuban ancestry who currently live in the Cayman Islands.

The initiative seeks to resolve the issue many Cayman-Cuban immigrants continue to face regarding their immigration status. In search of work during the 1940s and 1950s, Caymanians moved to Cuba. When they later returned to the Cayman Islands following the end of the Cuban revolution, many were never given the opportunity to reinstate their Caymanian citizenship. This left many families without proper Caymanian citizenship, leading to complications when attempting to exercise their rights as Caymanian citizens. With this proposal, the children, grandchildren and great-grandchildren of Caymanians who immigrated from Cuba would be granted citizenship.

Dominican Republic Resumes Egg Exports to Cuba

On July 23, it was reported that the Dominican Republic has resumed exporting eggs to Cuba, thanks to a new Dominican regulation providing subsidies to maritime transport. This regulation seeks to offset the rising logistical costs of exporting produce to Cuba. Such logistical costs have been exacerbated by U.S. sanctions and have caused the Dominican Republic to pause its egg exports to Cuba, totaling around 65 million eggs per month, earlier this year.

The Dominican Republic has maintained diplomatic ties with Cuba throughout its ongoing humanitarian and energy crisis, and historically provided relief to the island following major hurricanes. However, in addition to alleviating food shortages on the island, Dominican officials also hope that the shipments will help stabilize and strengthen the Dominican Republic’s poultry industry and preserve thousands of jobs by boosting demand.

It is estimated that 12 containers, each housing 3,900,960 eggs, have already been shipped, with support from the shipping companies Agrokilda, Granja Wilse, Huevos Perla, and Agropecuaria SSK. The Dominican Republic’s government anticipates making shipments twice a month, projecting to send 13 million eggs per month to Cuba. Although nowhere near the previous import levels, this produce is expected to provide relief to the Cuban people, who continue facing severe food shortages. However, doubts remain regarding the extent of this relief, as a single egg costs 130 pesos and a carton of 30 eggs costs 3,600 pesos. The minimum wage in Cuba is only 3,210 pesos, making the purchase of eggs a challenge for many residents.

Recommended Reading, Listening & Viewing: 

Leer | El País: Carlos Saladrigas, empresario: “Recomendamos que se haga un Plan Marshall para Cuba”

Read | El País: The protest that broke the silence in Cuba: ‘It changed my whole life’

Read | Foreign Policy: Special Treatment for Cuban Refugees’ Is No More

Read | Mother Jones: “Not All Cubans Are MAGA”: The Cuban Women Who Broke With the GOP

Watch | New York Times: Cubans Aren’t Sleeping in Sweltering Blackouts

Read | New York Times: Cuba to Trump: We’re Open for Business

Read | New York Times: Cut Off From Fuel, Cuba Is Still Surviving

Read | New York Times: The Cuban Way

Read | NPR: With U.S. Doors Shutting, Cubans Turn to Brazil For Asylum

Read | The Guardian:‘We count every litre’: how Cuba’s energy crisis sparked a daily struggle for water

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