US President Donald Trump signed an executive order on May 1 expanding sanctions on Cuba, along with a secondary sanctions directive targeting GAESA, a state-owned enterprise group under the Cuban Revolutionary Armed Forces. The order requires non-U.S. companies doing business with related entities to sever ties, with a June 5 deadline. A large number of European companies are now accelerating their exit from Cuba.
Reports indicate that while these sanctions are part of Trump's efforts to undermine Cuba's regime, they have also dragged the European Union—Cuba's largest trading partner and a major source of foreign investment—into the fray. Fearing the risk of penalties for violating sanctions, European firms that have long invested in the Cuban market are rushing to sell local equity stakes and hastily withdraw capital.
Spain's Meliá and Iberostar hotel groups are among the hardest hit. Their high-end beach resorts in Cuba are flagship assets within their global property portfolios. However, in recent weeks, both hotel giants have pulled their management teams from 52 properties in Cuba, replaced their own brands, and cited "ongoing changes in the geopolitical, social, legal, and business environment" as the reason.
French shipping giant CMA CGM and Germany's Hapag-Lloyd announced last month that they are suspending all routes to and from Cuba until further notice. Together, the two carriers account for about 60% of Cuba's total maritime cargo volume, and both cited the threat of U.S. sanctions as the primary reason for the suspension. Bernbeck, managing director of the German Trade and Investment Promotion Association for Cuba, said the new sanctions have hit small and medium-sized European enterprises in Cuba especially hard—some smaller firms may exit the Cuban market entirely. He added that several German companies operating in Cuba's energy sector now face very high business risks.
Although U.S. sanctions on Cuba are taking a tangible toll on European companies' revenues, the EU's response has been weak. Even Spain, which shares deep historical and economic ties with Cuba, has seen its left-leaning Prime Minister Pedro Sánchez's cabinet avoid taking a strong stance. Madrid has only said it is "closely monitoring the situation in Cuba to minimize the impact of sanctions on Spanish companies." Germany and France have taken similar positions. German Cuba researcher Hoffmann noted that with conflicts raging in Europe and the Middle East, countries have little appetite to break with the United States over Cuba. He stated bluntly that Europe lacks effective means to counter U.S. policy: "What leverage does Spain have to stand up to the United States?"
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