For over 50 years, the US imposed a trade embargo, preventing the exchange of goods from the US to Cuba. In December 2014, with the Cold War long over, President Obama announced plans to recreate relations with Cuba, by re-establishing an embassy in Havana, and to ease the trade restrictions from the embargo. There are a few changes from this law that will impact the container shipping industry. The authorization from President Obama will make it easier for US companies to export building materials and farming supplies to Cuba. However, the embargo is still active. In order for the embargo to end, Congress must take action.
When the embargo is finally over, your freight forwarder can fill you in on the good news. Once the embargo ends, companies that produce cheap consumer products, like food and household goods, will be posed to benefit from the newly opened trade market.
Cuba’s biggest imports include refined petroleum and wheat. Currently, the European Unions ships $150 billion worth of wheat annually to Cuba. If trade relations were to open between the US and Cuba, then it seems that the US might take the business away from the European Union. Because of their close proximity, US Companies might be able to get better ocean freight rates, and thus a competitive edge.
The US Chamber of Commerce projects that the United States loses $1.2 billion every year because of the embargo. If the embargo were to end, then the economy and many US companies will benefit greatly from the new market of consumers in Cuba.