A decision to lift restrictions on American travelers who want to buy Cuban cigars or rum abroad has stoked fears that it will hurt small businesses at home.
President Obama announced the new policy directive Friday, saying that it would build on administration actions taken last year to normalize relations with the island nation.
Under the previous policy, American travelers who visited Cuba directly could bring back cigars and rum if the purchase did not exceed $100. Now, under the new executive order, Americans can bring back an unlimited amount of such goods purchased around the world, provided that it’s for their own personal use.
“This was something I was hoping and dreaming of for many years,” Dave Garofalo, co-owner of the Two Guys Smoke Shops in New Hampshire, told AMI Newswire. But he said the Obama administration’s new tobacco regulations will prevent him and other small cigar businesses around the United States from selling Cuban cigars.
“Customers will buy from outside of the nation rather than from me,” Garofalo said. “My business is about to be devastated.”
Customers at his stores have told him that they may purchase boxes Cuban cigars when traveling outside the country, meaning fewer cigar sales for his company. Cigar shops in the United States are a cottage industry that sell about 300 million cigars per year, Garofalo said.
The Food and Drug Administration finalized a federal rule on Aug. 8 to regulate all tobacco products that haven’t been marketed in the United States since February 2007. So products such as Cuban cigars would have to go through a complex, expensive compliance process, he said.
The net effect will be to hurt small businesses in the United States since they won’t be able to sell the popular Cuban tobacco products to their customers, Garofalo said.
The new federal policy also received harsh criticism from Cuban-American political leaders who see it as giving away too many concessions to Cuban President Raul Castro.
“This latest round of regulatory changes, like the ones before it, will do nothing for the suffering Cuban people and will instead further enrich the coffers of Castro state-owned entities while crushing the hopes that 11 million Cubans have for freedom, democracy and human rights,” said Rep. Ileana Ros-Lehtinen (R-Fla.) in a prepared statement.
“While the Castro communist dictatorship keeps an iron grip on the people with one fist, the other hand is extending its dictatorial power as it receives more and more dollars from these rollbacks of regulations,” she said.
Florida Sen. Marco Rubio expressed similar sentiments on Friday.
“The Obama administration is making more concessions to the Castro regime, and the United States is getting nothing in return,” Rubio said. “Cash makes the Castro regime’s grip on power stronger, its repression harsher and its exportation of misery throughout the hemisphere, especially Venezuela, easier.”
In explaining the policy, National Security Adviser Susan Rice said the U.S. economic embargo against Cuba, which has been in place for more than 50 years, failed to dislodge the Castro regime and ended up hurting the Cuban people.
“Congress should now do its part,” Rice said. “We must lift the embargo once and for all.”
The aim of the new directive is to build bilateral relations and to initiate a series of changes to promote more commerce and a free exchange of information between the two nations.
“We’re lifting the cap on Cuban merchandise that Americans can bring back for personal use,” Rice said. “That includes alcohol and tobacco products. You can now celebrate with Cuban rum and Cuban cigars.”
In a prepared statement, Obama said the regulatory changes issued by the Departments of Treasury and Commerce were designed to extend the hand of friendship to the Cuban people.
“Challenges remain – and very real differences between our governments persist on the issues of democracy and human rights – but I believe that engagement is the best way to address those differences and make progress on behalf of our interests and values,” he said.