Mastercard and Visa said cards issued by non-U.S. banks can no longer be used in Cuba because a foreign partner that connects merchants to the payment networks has curtailed operations in the market. Americans were already prohibited from using their cards on the island. The suspension, announced by Cuba’s central bank, takes effect Saturday.
Meliá said its decision to close 15 hotels was driven by circumstances beyond the firm’s control, noting that most were already shuttered “due to the energy challenges and the decline in demand” affecting the island. Iberostar said it would cease operating 12 hotels in Cuba “as part of an effort to adapt to the international regulatory environment.” Royalton Hotels & Resorts, a Canadian operator, has already ceased operations after a collapse in tourism.
Sherritt International, which for more than three decades extracted nickel and cobalt from the Moa mine in eastern Cuba, said it would dissolve its joint ventures in Cuba before reversing course and announcing a nonbinding preliminary agreement to sell a controlling stake to Gillon Capital, a private family office linked to Ray Washburne, a Republican financier who served in Trump’s first administration. The company’s chief financial officer, external auditor and several board members resigned. Shares of Sherritt have fallen more than 50% amid the turmoil.
Mark Entwistle, Canada’s ambassador to Cuba during the 1990s when Sherritt was establishing itself on the island, told the Journal the company did far more than operate a mine. “It effectively trained a whole series of Cuban business executives on how modern companies work,” Entwistle said, helping create “an embryonic business class that was very, very revolutionary in Cuba at the time.”
Ricardo Torres, a Cuban economist at American University in Washington, called the developments “an inflection point” and “a major blow to an already weakened economy.”
The corporate exodus came after several major airlines canceled flights into Cuba because of jet fuel shortages. Cuba’s economy has been deteriorating for years amid mismanagement, corruption and U.S. sanctions. The situation worsened after the Trump administration imposed an oil blockade following the January capture of Venezuelan leader Nicolás Maduro, whose government had long supplied subsidized oil to Havana.
Without that lifeline, public transportation has been curtailed, farmers struggle to get produce to market and residents endure hourslong blackouts. Cuba’s peso currency has fallen to around 620 to the dollar on the informal market, according to El Toque, an independent Cuban news site. Cubans have protested by banging pots and burning garbage. Hundreds of thousands have left the island.
In May, Trump signed an executive order targeting Cuba’s military-owned conglomerate GAESA. The U.S. says GAESA controls at least 40% of Cuba’s economy, including many hotels operated through partnerships with foreign companies such as chains that are now leaving. The order effectively forced foreign investors to choose whether to continue doing business with entities tied to Cuba’s military or risk secondary sanctions.
“The Trump administration is focused like a laser on the military, intelligence and state security services and any dealings they have with foreign companies,” said Ricardo Herrero, executive director of the Cuba Study Group. “That is where the power is.”
The measures are part of a wider campaign by Washington to extract political and economic concessions from Havana. Last month, U.S. prosecutors charged former President Raúl Castro with murder over the military’s shootdown of civilian aircraft in the 1990s. On Thursday, Washington sanctioned current President Miguel Díaz-Canel, members of his family, Castro’s son and grandson, and several Cuban entities.
Ted Henken, a Cuba expert at Baruch College, described the combination of economic collapse and intensified sanctions as “a one-two punch” and “a gradual but consistent strangulation coming from the Trump administration.”
For decades, foreign corporations accepted the risks of operating in Cuba, seeking a foothold in the island’s tourism and mining sectors despite a long-running U.S. embargo. They were among the last vestiges of foreign investment in an economy dominated by the communist state. Now, the Journal reported, many have concluded that the risks outweigh the rewards as they confront both a deepening economic collapse and a Trump administration determined to increase pressure on Havana.