A United States embargo has prevented U.S. businesses and citizens from conducting trade or commerce with Cuban interests since 1960. Modern diplomatic relations are cold, stemming from historic conflict and divergent political ideologies. U.S. economic sanctions against Cuba are comprehensive and impact all sectors of the Cuban economy. It is the most enduring trade embargo in modern history. The U.S. government influences extraterritorial trade with Cuba. The embargo has faced international condemnation for its adverse impact on Cubans, including by the United Nations who have formally condemned it intermittently since 1992.
The U.S. government first launched an arms embargo against Cuba in 1958, with their energy and agricultural sectors targeted in 1960. Following the Cuban Revolution, there were nationalizations and a trade war between the two countries. In October the Cuban government responded with seizure of American economic assets, including oil refineries. The U.S. retaliated with a total embargo on Cuban trade, with exceptions for food and medicine. Cuba held nuclear missiles for the Soviet Union during the 1962 Cuban Missile Crisis, which resulted in the U.S. fully blockading the island. The embargo was loosened during the Cuban thaw from 2015 to 2017, but was tightened sharply again thereafter.
The embargo is enforced mainly through the Trading with the Enemy Act of 1917, the Foreign Assistance Act of 1961, the Cuban Assets Control Regulations of 1963, the Cuban Democracy Act of 1992, the Helms–Burton Act of 1996, and the Trade Sanction Reform and Export Enhancement Act of 2000. Relations remain tense due to stark differences on immigration, counterterrorism, civil and political rights, human rights, electoral interference, disinformation campaigns, humanitarian aid, trade policy, financial claims, U.S. foreign policy, and Cuban foreign policy.
The United States imposed an arms embargo on Cuba on March 14, 1958, during the armed conflict of 1953-1959 between rebels led by Fidel Castro and the Fulgencio Batista régime. Arms sales violated U.S. policy which had permitted the sale of weapons to Latin-American countries which had signed the 1947 Inter-American Treaty of Reciprocal Assistance (Rio Treaty) as long as the weapons were not used for hostile purposes. After the Castro socialist government came to power on January 1, 1959, relations were initially friendly between Castro and the Dwight D. Eisenhower administration.
In December 1959, less than twelve months after the Cuban Revolution, the Central Intelligence Agency (CIA) developed a plan for paramilitary action against Cuba. It was approved and implemented in March 1960. The CIA recruited operatives on the island to carry out terrorism and sabotage, kill civilians, and cause economic damage.
In April, the U.S. Department of State issued a memorandum acknowledging majority support within Cuba for the Castro administration, the fast spread of communism within the country, and the lack of an effective political opposition. In May the Cuban government began regularly and openly purchasing armaments from the Soviet Union, citing the U.S. arms embargo. In July 1960 the U.S. reduced the import quota of brown sugar from Cuba to 700,000 tons under the Sugar Act of 1948; the Soviet Union responded by agreeing to purchase the sugar instead.
In June 1960, Eisenhower's government refused to export oil to the island, leaving Cuba reliant on Soviet crude oil. Cuba and the Soviet Union signed a trade agreement according to which the Soviet Union would provide 900,000 tons of oil to Cuba. The U.S. viewed the agreement as a provocation, and successfully urged Esso, Texaco, and Shell to refuse to process Soviet crude in their Havana and Santiago de Cuba refineries. On June 29 and July 1, 1960, Cuba confiscated the refineries. The U.S. responded by canceling its quota of sugar purchases from Cuba.
On July 11, 1960, Eisenhower wrote a personal letter to the UK prime minister Harold Macmillan encouraging joint action in sanctioning Cuba. Eisenhower elaborates in the letter that the reason for the original diplomatic decline with Cuba was:
The story of the cancellation of elections, of the ascendancy of the Communist oriented group and purge of the moderates, of the executions and the hounding of all anti-Communists, of the abortive Cuban-supported efforts to overthrow various Caribbean governments, and of the shrill anti-American diatribes... We were directly affected when Castro, choosing the Agrarian Reform Law version advanced by the extremists, authorized the expropriation of extensive American properties without acceptable provision for compensation.
Eisenhower goes on to mention that despite these issues, he pursued a "policy of restraint" throughout 1959, but that the ultimate factor leading to a proactive approach against the Castro government in 1960 was:
...the degree to which Cuba had been handed over to the Soviet Union as an instrument with which to undermine our position in Latin America and the world.
In response to sanctions, on August 30, 1960, the Cuban government nationalized three American-owned oil refineries as well as Compañía Cubana de Electricidad, the Cuban Telephone Company, and 36 sugar mills. The refineries became part of the state-run company, Unión Cuba-Petróleo. This prompted the Eisenhower administration to launch the first trade embargo—a prohibition against selling all products to Cuba outside of humanitarian aid.
In October 1960, the Cuban administration responded by nationalizing all American businesses and most American privately owned properties on the island. Castro promised to separate Americans in Cuba from all of their possessions "down to the nails in their shoes". Cuba's nationalization laws required the government to compensate the owners of seized property, but compensation was to be made in Cuban bonds, an offer rejected by American authorities. Payments pursuant to the Cuban bonds were to be paid from the sale of Cuban sugar to the U.S., but the Americans had just canceled its purchases of Cuban sugar. No compensation was paid. Other countries which had their assets nationalised, including Switzerland, Canada, Spain, and France, were more agreeable to Castro’s terms, seemingly convinced that they would not be able to get a better deal.
The second wave of nationalizations prompted the Eisenhower administration, in one of its last actions, to sever all diplomatic relations with Cuba in January 1961. The U.S. partial trade embargo with Cuba continued under the Trading with the Enemy Act of 1917. The Cuban government's nationalization of U.S. owned property is the “largest uncompensated taking of American property by a foreign government in history.” Assets seized, included vacation homes and bank accounts of wealthy individuals, but most seized property was owned by large American corporations, including sugar factories, mines and oil refineries.
Following the Bay of Pigs Invasion of 17 to 20 April 1961, an operation devised under Eisenhower but which President John F. Kennedy had approved preceding his presidency, Castro characterized the Cuban revolution and state as "socialist". It aligned with the Soviet Union. On September 4, 1961, partly in response, Congress passed the Foreign Assistance Act, a Cold War Act that prohibited aid to Cuba and authorized the President to impose a complete trade embargo against Cuba. On January 21, 1962, Cuba was suspended by the Organization of American States (OAS), by a vote of 14 in favor, one (Cuba) against with six abstentions. Mexico and Ecuador, two abstaining members, argued that the OAS Charter did not authorize expulsion. Multilateral sanctions were imposed by OAS, led by the U.S., on July 26, 1964, but were later rescinded on July 29, 1975. Relations between Cuba and the OAS have since warmed and the suspension was lifted on June 3, 2009.
Starting in November, the U.S. engaged in a violent campaign of terrorism and sabotage against civilians and military targets on the island, known as the Cuban Project. As well as the removal of the Castro government, the U.S. sought to force the Cuban government to introduce intrusive civil measures and divert precious resources to protect its citizens from the terror attacks.