Cuba Trade Data
On December 17, 2014, the governments of the United States and Cuba announced their plans to restore diplomatic relations. This announcement signaled a drastic shift in the American foreign policy of the last 50 years. This shift could have significant implications for the U.S. economy as a whole and the Sixth Federal Reserve District in particular. The Sixth District, home to the ports of Miami and New Orleans, will likely face increases in both demand and competition for many of its goods and services.
To better understand Cuban trade relations moving forward, we first need to examine the components of Cuba's economy.
Two relevant questions are: What does Cuba trade? With whom is Cuba trading?
In chart 1, we see that almost 40 percent of Cuba's goods exports are minerals and ores, namely petroleum and nickel products, with another 40 percent being agricultural in nature, mostly raw sugar and rolled tobacco.
Similarly, in chart 2, we see Cuba's imports, mostly machinery and equipment. Where these imports are coming from is shown in chart 3. The top import origins of Cuba are China ($1.22B), Spain ($1.06B), and Brazil ($528M), with Canada ($431M) and Mexico ($368M) coming in shortly after.
Note: Data downloads are available for finer import and export detail.
The Cuban government still directs much of this economic activity, and most citizens work for the state. However, substantial reforms have recently expanded the possibility of retail self-employment, with the number of self-employed people tripling in recent years.
Given these trading patterns and President Obama's request to Congress to lift the trade embargo, it is important to note that the United States already trades with Cuba. In October 2000, the Trade Sanctions Reform and Export Enhancement Act authorized certain sales of food, medicines, and medical equipment to a number of countries, including Cuba.
In our most recent year of data (2015), the United States exported more than $180 million worth of goods to Cuba, with 60 percent of that trade originating in the Sixth District.
Further, the transactions that the Department of Commerce approved last year were up 30 percent from 2014. Questions frequently asked of the Office of Foreign Assets Control regarding Cuban sanctions are available on the U.S. Department of the Treasury's website.
Looking at chart 4, we see that U.S. trade with Cuba largely follows Sixth District trade, which in turn largely follows Louisiana trade, most likely due to the state's vast rice and sugar plantations.
Bilateral trade in goods between Cuba and Venezuela accounted for 44 percent of Cuba’s total goods trade in 2012. Venezuela and Cuba engage in oil-for-services trade, which is not accounted for in the UN COMTRADE data shown here. See this 2014 policy brief from the Brookings Institution.
Because of rising commodity prices and in the aftermath of Hurricane Ike that devastated Cuba, U.S. exports to Cuba peaked dramatically in 2008 at $711 million.
Currently, U.S. trade with Cuba is relatively miniscule on the scale of trade as a whole. Last year's exports to Cuba were valued at less than two-tenths of a percent of U.S. exports to China, and approximately one-hundredth of a percent of U.S. exports as a whole.
The U.S.-based Hotel and Resort Companies (Starwood, Marriott) is exploring development and management opportunities because, according to Bloomberg, Cuba has only 63,000 hotel rooms nationwide and infrastructure is overloaded. Cuba's government is trying to increase tourism revenue. The number of visitors to Cuba grew to 3 million in 2013 (chart 5)—a figure that is estimated to have grown to 3.5 million in 2015—and U.S. tourists are expected to arrive in great numbers once travel restrictions are eased further and regularly scheduled airline flights from the United States commence.
- The Observatory of Economic Complexity, MIT
- World Bank Economic Data
- Cuban Research Center, Florida International University