• First Secretary of the Cuban Communist Party Miguel Díaz-Canel announced Cuba’s biggest structural reform package since the revolution in 1959.
• The economic measures come as the United States embargo has left Cubans without fuel, food and electricity.
• Despite the urgency, reforms are obstructed by Cuban bureaucracy and Díaz-Canel’s lack of motivation to champion their adoption.

Why is Díaz-Canel COLD?

Answer: Díaz-Canel’s radical economic reform proposal fails to achieve its true purpose, appeasing the U.S. to lift its embargo on the island.

First Secretary of the Cuban Communist Party (PCC) and President of Cuba, Miguel Díaz-Canel, announced on June 12 his intention to implement 176 economic and social measures designed to open the economy while retaining Cuba’s socialist model. The reforms target Cuba’s agriculture, energy and tourism sectors, and end state monopolies on foreign trade, private investment, land ownership, distribution of fuel, and lift the cap on firm size. The announcement comes as the U.S. January 29 executive order “Addressing Threats to the United States by the Government of Cuba” tightened the embargo by threatening tariffs on any country supplying Cuba with oil. The subsequent polycrisis has deprived Cuba of medical services, electricity and transport systems for food and water.

The proposal passed unanimously by June 18, but what Cubans call the “domestic blockade”, their own bureaucracy, stalls implementation. However, the proposal needs the amending or repealing of 148 existing instruments and the enactment of 32 new laws of which only four have reached the Ministry of Justice. This is not surprising given that just 9 out of 17 instruments were enacted in the previous round of reforms.

The true purpose of the bill has a source of scepticism and thought as a gesture to appease the U.S. by signalling a willingness to change institutions without meaningful reform. Regardless, economic reconstruction alone is insufficient for the U.S. which demands political reform along with an open economy, causing it to maintain its embargo. The reforms fail in their true purpose to “buy time” as the U.S. has increased sanctions on Cuban targets directly after Díaz-Canel’s announcement.

What is changing Díaz-Canel’s heat level?

Answer: Díaz-Canel faces many hurdles; internally the Grupo de Administración Empresarial (GAESA) slows down reform while externally the U.S. rejects any action that is not a change in leadership.

The GAESA, a military organisation in control of business in Cuba, forms the bulk of Cuba’s slow bureaucracy. It contributes 50% of GDP, 80% of the services sector and acts as the country’s central bank. Díaz-Canel’s economic reforms challenge the GAESA by repealing joint-state company venture requirements and deregulating the economy, regulations the organisation has depended on for its prosperity. Díaz-Canel has no control over the GAESA while it holds a veto over any transition, which lends credence to the idea that Díaz-Canel’s reforms were largely performative.

The U.S. uses the GAESA’s nature as a hardline communist group in the Cuban government as justification for sanctions. U.S. Secretary of State Marco Rubio refers to the Cuban economic elite (GAESA and the Castro family) as a national security threat, which he then uses to legitimise Washington’s “maximum pressure” strategy. The U.S. efforts to punish the Cuban government have intensified to individual sanctions on high ranking members of the Government and Díaz-Canel himself. 

Researchers from the Center for Economic and Policy Research (CEPR), UN experts and Cuban officials have accused Washington of deliberately causing a humanitarian crisis to force the Cuban government to change. Cuba imports 70-80% of its food, and sanctions have choked those flows while causing nearly $8 billion in losses since January 2026. Water systems are unable to distribute water and doctors do not have access to medical tools. The U.S.’s deliberate multidimensional crisis in Cuba is meant to pressure Díaz-Canel to resign, pushing him into a corner and limiting the action he can take. The future of Cuba depends on U.S. sanctions.

Unlike the GAESA, whose opaque organisation and control of the dollar economy protects it from shocks, Díaz-Canel has taken the burden of public pressure. Cuban locals have revealed that there are consistent protests on the streets of Havana. The PCC office in Morón was set on fire in March. Furthermore, 1,959 acts of repression were reported by the Cuban Observatory for Human Rights in the first half of 2026. The protests, while widespread, are spontaneous and unorganised. Nonetheless, the increasing frequency of unrest makes the foundation of Díaz-Canel’s power increasingly unstable.

What is driving Miguel Díaz-Canel?

Answer: Díaz-Canel continues to resist the U.S. because of the strong personal and ideological motivations to defy the U.S.’ efforts to change the political system in Cuba.

Díaz-Canel refuses to expand reforms beyond economic dimensions because of his adherence to Castroism, the central theme of which is the continuation of a socialist Cuban state. It emphasises Cuban nationalism and resistance to imperial forces, which has been a key political frame used by Díaz-Canel to maintain support amongst the Cuban population. Adhering to this ideology has the added benefit of placating the GAESA who would view capitulation to the U.S. as a threat to their political power.

The U.S. has demonstrated its distaste for Díaz-Canel and willingness to undermine his authority in Cuba. The U.S. has excluded Díaz-Canel from negotiations, opting to work with Raúl G. Rodríguez Castro, Raúl Castro’s grandson instead. For Díaz-Canel, making concessions to the U.S. implies compromising his power to appease the U.S. As a result, the legitimate implementation of the economic reforms never aligned with Díaz-Canel’s personal motivations. Additionally, U.S. negotiations with Cuba have fallen through which shows that there are few within the Cuban government who can replace Díaz-Canel.

What does this mean for you?

Answer: The situation in Cuba is bleak, with Díaz-Canel and Trump having shown their commitment to resisting the other, a deadlock that only hurts the people of Cuba.

Cuba has repeatedly affirmed that political change is non-negotiable, while the U.S. has said that it would stop its embargo if there is a change in leadership. With both sides entrenched in their position it is likely that the embargo will continue to test the Cuban government’s ability to hold onto power as the population is deprived of food and water.

Cuba’s future has consequences for the rest of Latin America. Trump’s efforts to change the regime in Cuba are evidence of the Donroe Doctrine in action. He had outlined his plans for Cuba in the days after Venezuelan President Nicolás Maduro’s capture. Following this pattern, he has hinted at intervention in Colombia and Mexico.