Cuba is bleeding toward collapse incrementally
As a June 5 deadline passed, four major foreign hotel chains severed ties with Cuba's military-run economic conglomerate GAESA, the latest turn in a long and painful story of an island caught between an unyielding embargo and an unyielding government. The United States has moved from targeted pressure to something closer to total economic siege, cutting off tourism, remittances, and now the international payment systems that connect Cuba to the world. Economists and observers warn that what is unfolding is not merely a geopolitical standoff but a slow humanitarian emergency, one in which ordinary Cubans bear the heaviest cost of a conflict they did not choose.
- Four major hotel operators — Spanish, Canadian, and Indonesian — halted Cuban operations this week as US sanctions targeting GAESA, the military conglomerate controlling up to 70% of the economy, formally took effect.
- The loss of Visa and Mastercard services, triggered by secondary sanctions threats that severed Cuba's foreign banking link, has struck at the three pillars of the island's hard currency: tourism, remittances, and service exports.
- Shipping lines, airlines, and mining firms have joined the exodus in recent weeks, with decades of operational history on the island dissolving under the weight of Washington's escalating pressure campaign.
- Cuba's government floats alternative models — domestic investors, sanction-free foreign partners — but economists question who would enter a market with no customers, no payment infrastructure, and no clear horizon.
- Negotiations appear deadlocked: the US is pursuing regime change rather than incremental reform, Cuba refuses to capitulate, and the population faces deepening shortages, political repression, and the creeping prospect of humanitarian catastrophe.
Four major foreign hotel operators — Spain's Meliá and Iberostar, Canada's Blue Diamond, and Indonesia's Archipelago Internacional — pulled back from Cuba this week as a US-imposed deadline requiring companies to cut ties with GAESA took effect on June 5. GAESA, the Cuban military's economic conglomerate, controls between 40 and 70 percent of the island's productive capacity, making it both the target of Washington's pressure and the backbone of the Cuban economy.
The hotel departures were not isolated. In recent weeks, German shipping line Hapag-Lloyd, French container firm CMA CGM, Spanish airline Iberia, and Canadian mining company Sherritt had already announced exits. Economists note that what distinguishes this moment is the departure of firms with decades of history on the island — a sign that sustained American pressure has finally reached a threshold foreign companies cannot absorb.
The financial system absorbed the shock immediately. Cuba's Central Bank announced the suspension of Visa and Mastercard services after the foreign bank processing those transactions severed its relationship with FINCIMEX, GAESA's financial arm, under the threat of secondary sanctions. For a country already starved of hard currency, losing international payment infrastructure is a catastrophic blow to tourism, remittances, and service exports — the three remaining pillars of Cuba's foreign exchange.
The Cuban government has spoken of alternative models: Cuban investors taking over hotels, foreign partners without US banking exposure. But economists are skeptical. Who, one asked, would run a hotel with no guests and no recovery in sight? President Díaz-Canel accused Washington of engineering social collapse to justify military intervention and appealed to the EU and Spain to shield their companies from what he called extraterritorial American law.
Experts see little room for optimism. Only a negotiated settlement involving significant Cuban concessions could reverse the trajectory, and even then it would need to be durable enough to restore business confidence. But talks appear stalled: the US has shifted from reform-oriented pressure to outright regime change as its goal, while Cuba refuses to yield. One political economist called the strategy a cruel method of forcing political change — one bleeding the island toward collapse incrementally, with the population absorbing the cost through shortages, repression, and hardship. A Cuban economist in Colombia argued that only a genuine democratic transition, driven from within rather than imposed from without, offers any real path forward — and warned that history would not forgive continued inaction.
Four of the largest foreign hotel operators in Cuba shut down or drastically reduced their presence on the island this week. Meliá and Iberostar, both Spanish; Blue Diamond, Canadian; and Archipelago Internacional, Indonesian—all pulled back as a June 5 deadline imposed by the Trump administration came and went. The deadline required foreign companies to sever ties with GAESA, the military-controlled conglomerate that functions as the economic spine of the Cuban state, controlling somewhere between 40 and 70 percent of the island's productive capacity depending on which economist you ask.
They were not alone in leaving. In recent weeks, the German shipping line Hapag-Lloyd and the French container company CMA CGM announced their exits. Before them came the Spanish airline Iberia and the Canadian mining firm Sherritt. What makes this moment significant, according to Ricardo Torres, an economist at American University who studies Cuba, is that sustained American pressure has finally forced out foreign firms with decades of operational history on the island. The pressure has been building methodically. In January 2026, the U.S. imposed an oil embargo. Since then, successive rounds of sanctions have targeted government organizations, military enterprises, and senior officials—including President Miguel Díaz-Canel and members of the Castro family. The most recent escalation threatened secondary sanctions against any entity maintaining business relationships with the sanctioned parties.
The financial system felt the shock immediately. The Central Bank of Cuba announced that Visa and Mastercard services would cease operations. The foreign bank processing these transactions—its name was not disclosed—had terminated its relationship with FINCIMEX, the financial arm of GAESA, after Washington's secondary sanctions threat made the connection untenable. For a country already starved of hard currency, the loss of international payment systems represents a catastrophic vulnerability. Tourism, remittances from Cubans abroad, and service exports are the three pillars holding up Cuba's foreign exchange reserves. All three are now under assault.
Paolo Spadoni, a political economist at Augusta University and an expert on Cuban tourism, explained the mechanics plainly: by sanctioning GAESA, the United States has made it nearly impossible for most foreign companies to continue operating in Cuba, particularly in the tourism sector where GAESA's grip is tightest. It is, he said, a severe blow to an economy already weakened by years of scarcity. The Trump administration had already restricted remittances flowing from Cuban migrants in the United States and forced Cuban medical brigades to withdraw from multiple countries. Now it was cutting off the oxygen to the tourism industry itself.
The Cuban government insists it is exploring alternative business models—bringing in Cuban investors willing to operate hotels, or foreign entities without American banking dependencies. But as one economist asked aloud, who would want to run a hotel with no customers and no clear path to recovery? President Díaz-Canel accused the United States of deliberately engineering social collapse to justify military intervention. He called on the European Union and Spain to protect their companies and citizens from what he termed extraterritorial American law. Yet the government's own options are narrowing by the day.
Ricardo Pérez, an economist at Washington University, offered a blunt assessment: only a negotiated settlement involving substantial Cuban concessions could alter the trajectory. Cuba cannot recover without a durable agreement to relax or lift American sanctions—and it would need to be permanent and long-term to restore any business confidence. The support of allies like China and Russia, he noted, would remain largely symbolic. But negotiations appear to have stalled. The United States is pursuing regime change as its primary objective, abandoning earlier rhetoric about economic reform leading to gradual political change. The Cuban government, unsurprisingly, refuses to capitulate. A mutual agreement now seems, in Spadoni's assessment, highly unlikely.
What has emerged instead is a strategy of maximum economic pressure designed to provoke internal collapse and social upheaval. Spadoni called it a cruel method of forcing political change, one that risks both economic catastrophe and a major humanitarian crisis. Cuba, he said, is bleeding toward collapse incrementally. The island's population is already experiencing intensified shortages and daily hardships. Hundreds of political prisoners remain in custody. The government continues to suppress public discontent, which has surfaced repeatedly since the massive protests of 2021. Mauricio de Miranda, a Cuban economist at Javeriana University in Colombia, argued that only a genuine democratic transition—driven by internal necessity rather than external coercion—offers a way forward. He rejected both foreign military intervention and the government's continued repression of dissent. The government, he concluded, has squandered its opportunities. Time has run out. History and human justice will not forgive inaction.
Citações Notáveis
The pressure of the United States has finally forced out foreign firms with decades of operational history on the island— Ricardo Torres, economist at American University
Only a negotiated settlement involving substantial Cuban concessions could alter the trajectory. Cuba cannot recover without a durable agreement to relax or lift American sanctions— Ricardo Pérez, economist at Washington University
A Conversa do Hearth Outra perspectiva sobre a história
Why does GAESA matter so much that sanctioning it essentially strangles the entire economy?
Because the Cuban military doesn't just run the armed forces—it runs the economy. GAESA controls 40 to 70 percent of productive capacity. Hotels, ports, financial services, agriculture. When you sanction GAESA, you're not just targeting a company. You're targeting the circulatory system.
So foreign companies have no choice but to leave?
Not really. Once secondary sanctions enter the picture—meaning anyone doing business with GAESA gets sanctioned too—the math becomes impossible. A Spanish hotel chain can't operate if its bank account gets frozen. They leave because staying costs more than leaving.
What about the Cuban people in all this? Are they the target or collateral damage?
That's the question everyone's asking. The U.S. says it's targeting the regime. But when you cut off tourism revenue, remittances, and payment systems, ordinary Cubans feel it first. Shortages intensify. Medicine disappears. The government says it's being strangled; economists say it's being bled slowly.
Could Cuba negotiate its way out?
In theory, yes. In practice, both sides seem locked in. Washington wants regime change. Havana won't surrender. A real negotiation would require both sides to give something up. Neither appears willing.
What happens if this continues?
Economic collapse. Humanitarian crisis. The government keeps arresting protesters instead of listening to them. At some point, the pressure becomes unbearable. That's what the U.S. is betting on. That's also what terrifies economists watching it unfold.