Cuba’s Economic Challenges and Resilience in the Face of US Sanctions

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Trump Slaps 39% Tariff on Swiss Goods After “Disastrous” Call with President Keller-Sutter

Washington D.C.- A last-minute phone call between U.S. President Donald Trump and Swiss President Karin Keller-Sutter resulted in a substantially higher tariff rate on Swiss exports to the United States, a move described by Swiss media as a major national setback.Just days before Switzerland’s National Day, Trump announced a 39% tariff on Swiss goods – the highest in Europe – escalating from a previously discussed 31%.

The decision follows a 30-minute phone conversation on Thursday, which sources describe as “disastrous.” The call effectively ended over three months of negotiations where swiss officials had offered concessions, including potentially compromising $150 billion in U.S. investments, in exchange for a 10% tariff.

According to sources familiar with the conversation,Trump fixated on the $39 billion trade deficit between the U.S. and Switzerland, repeatedly asserting that Switzerland was “stealing money” from the United states. Keller-Sutter was reportedly unable to effectively respond to these claims.

“The call did not go well, since from the first minute Trump made it clear that 10% was not enough and that he could only focus that Switzerland stole money from the united states,” one source stated.

The 39% tariff is a meaningful blow to the Swiss economy, which exported over $63 billion worth of goods to the U.S. in 2024, creating the 13th largest bilateral trade deficit for the U.S. Switzerland is also a ample investor in the U.S. economy, ranking as the seventh largest foreign investor.

Swiss media have reacted sharply to the outcome, with some outlets labeling the failed negotiations Keller-Sutter’s “greatest failure” and the “greatest defeat” for Switzerland as the Battle of Bicocca in 1515. Some analysts point to Switzerland’s powerful pharmaceutical industry as a potential source of Trump’s frustration.

The new tariffs, ranging from 10% to 41%, were announced shortly before Trump’s August 1st deadline for countries to reach new trade agreements with the U.S. Syria (41%), Laos, and Myanmar (40%) received the highest rates, while Brazil and the United Kingdom were assigned the lowest at 10%. The U.S. has stated a 10% tariff applies to countries with a trade surplus with the U.S., and 15% to those with “small deficits.”

Source: RT in Spanish

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What are the primary ways the US embargo impacts Cuba‘s economic stability?

Cuba’s Economic Challenges adn Resilience in the Face of US Sanctions

The Historical Context of US-Cuba Relations & Economic Warfare

The story of Cuba’s economic struggles is inextricably linked to the decades-long US embargo. Initiated in 1960, following the Cuban Revolution, the embargo aimed to isolate the Castro regime.initially a limited trade restriction, it evolved into a comprehensive economic blockade, significantly impacting Cuba’s access to global markets, investment, and financial resources. Understanding this history of US sanctions against Cuba is crucial to grasping the current economic landscape. The embargo wasn’t simply about trade; it was a deliberate strategy to destabilize the Cuban economy and,proponents hoped,incite political change.

key economic Challenges Facing Cuba today

Despite recent, limited easing of restrictions, Cuba continues to grapple with severe economic headwinds.These challenges are multifaceted and interconnected:

Limited Access to Foreign Exchange: The embargo severely restricts Cuba’s ability to earn hard currency through exports, especially to the US market. This scarcity impacts imports of essential goods like food, medicine, and fuel.

Inefficient state-Controlled Economy: A significant portion of the Cuban economy remains under state control. While providing social services, this system often suffers from inefficiencies, bureaucratic hurdles, and a lack of innovation. economic reforms in Cuba have been slow and uneven.

Infrastructure Deficiencies: Decades of underinvestment, compounded by the embargo’s impact on access to technology and materials, have left Cuba’s infrastructure – including transportation, energy, and communications – in a state of disrepair.

Dual Currency System (Historically): Until 2021, Cuba operated a dual currency system (Cuban Peso – CUP and Cuban Convertible Peso – CUC), creating distortions and complexities in the economy. The unification of the currency, while intended to streamline the system, initially fueled inflation.

Impact of Global Events: External shocks, such as the COVID-19 pandemic and the war in Ukraine, have exacerbated cuba’s economic woes, disrupting tourism (a vital source of revenue) and increasing the cost of imports.

Food security Issues: Cuba imports a significant portion of its food, making it vulnerable to global price fluctuations and supply chain disruptions. Agricultural challenges in Cuba are compounded by climate change and limited access to modern farming technologies.

Resilience and Adaptation: how cuba Copes

Despite the immense challenges, Cuba has demonstrated remarkable resilience and ingenuity in navigating the economic blockade. Several strategies have been employed:

Tourism as a Lifeline: Prior to the pandemic, tourism was a major contributor to the Cuban economy. The government has actively sought to attract foreign investment in the tourism sector, focusing on sustainable and eco-tourism.

Biotechnology and pharmaceuticals: Cuba has developed a thriving biotechnology and pharmaceutical industry,producing innovative medicines and vaccines,some of which are exported to other countries. This sector represents a significant source of foreign exchange. Cuban biotechnology advancements are a point of national pride.

Medical Internationalism: Cuba’s deployment of medical personnel to other countries, often in response to natural disasters or health crises, generates revenue and enhances its international standing.

Remittances: Money sent home by Cubans living abroad (remittances) constitute a crucial source of income for many families and contribute significantly to the economy.

Self-Sufficiency Initiatives: The government has promoted urban agriculture and other initiatives aimed at increasing domestic food production and reducing reliance on imports.

Growing Private Sector (Cuentapropistas): The expansion of the private sector, known as cuentapropistas, has provided new economic opportunities and fostered entrepreneurship. However,this sector still faces significant regulatory hurdles.

The Role of Remittances and the Informal economy

Remittances play a vital role in sustaining many Cuban households. While the Cuban government historically restricted the flow of remittances, policies have evolved, and they are now a significant source of foreign currency. The impact of remittances on Cuba’s economy is ample, providing a crucial safety net for families and fueling local consumption.

Alongside remittances, a robust informal economy thrives in cuba. This sector, operating outside of official regulations, provides goods and services that are often unavailable or unaffordable through official channels. While contributing to economic activity,the