9 things you’ll want if Cuban embargo ends - rum, cigars and more

9 things you'll want if Cuban embargo ends: rum, cigars and more
1:45 p.m. Monday, May 9, 2016

BUSINESS

If the Cuban embargo is lifted, here are nine items, including rum and
cigars, that you may want:

CUBAN RUM

In this Monday, March 21, 2016, photo, Cuban President Raul Castro,
right, lifts up the arm of President Barack Obama at the conclusion of
their joint news conference at the Palace of the Revolution in Havana,
Cuba. One of Cuba's most renowned advocates of economic reform has been
fired from his University of Havana think tank, on Wednesday, April 20,
for sharing information with Americans without authorization, among
other alleged violations.(AP Photo/Ramon Espinosa, File)
Currently, several spirit distributors are prepared for the embargo to
be lifted so that delicious Cuban rum can flow into the U.S. However,
the company that imports it must comply with Alcohol and Tobacco Tax and
Trade Bureau regulations, obtain the necessary permits and pay the
required taxes and tariffs.

Once that happens, it's possible that the price of rum might drop
somewhat as more of the liquor enters the marketplace. The increase in
supply, with a steady demand for rum, would tend to drive rum prices down.

For now, Americans who visit Cuba can bring home up to $100 worth of
tobacco and alcohol. A one-liter bottle of Havana Club rum purchased in
Cuba starts at $5, according to Esquire.com.

CUBAN CIGARS

Cuban cigars are considered to be among the best in the world.
Currently, Americans can bring $100 worth of tobacco products into the
U.S. A box of Cuban cigars purchased in Cuba can run between $150 and
$775 plus currency exchange fees, according to Fortune.com.

But if further Cuban cigar restrictions are lifted, and more of these
delectable treats for smoking aficionados come into the market, their
prices might fall. Yet, if greater availability causes the demand for
Cuban cigars to grow and outpace supply, prices might remain high. In
fact, some experts predict prices will go up, according to Fortune.com.
Only time will tell how the availability of Cuban cigars will impact the
price.

CUBAN COMPUTER PROGRAMMERS

Cuba has relaxed requirements on its service-oriented entrepreneurs.
This Cuban policy change, combined with the opening of trade with the
U.S., is opening the door for many Cuban services imports. Because
computer programmers often can work from anywhere, this could make Cuba
an option for U.S. companies who are hiring remote workers.

To figure out how additional computer programming work imported into the
U.S. might impact prices, take a look at the cost of living in Cuba.
Rent is 67 percent lower than in the U.S.; excluding rent, the cost of
living is 27 percent lower than in the U.S. The U.S. median computer
programmer is paid $38.24 hourly, according to the most recent pay scale
data from the Bureau of Labor Statistics.

Additionally, the BLS predicts an 8 percent decline in demand for U.S.
computer programmers between 2014 and 2024, exactly because their work
can be easily performed by workers in lower cost-of-living countries
such as Cuba. Therefore, the entrance of Cuban programmers in the U.S.
market might further depress the price of computer programming services.

CUBAN BOOKKEEPING SERVICES

Similar to computer programmers, bookkeepers can work from anywhere.
Importing bookkeeping services - but not accounting services - from Cuba
can be beneficial as it brings more work to Cubans.

This could also have a ripple effect in the U.S. If bookkeeping service
pricing declines, the hiring firm can either lower prices on its
products or keep them the same, which would benefit U.S. consumers.

USED CARS

Cuba's roads are filled with what people in the U.S. consider "vintage
cars." This means that Cuban demand for newer vehicles might impact
prices on used cars in the southeast regions of the U.S.

Mike Arman previously exported U.S. cars to St. Maarten. Arman, who is
currently in another line of work, said that with the pent-up Cuban
demand for newer cars on the tiny island, it's likely that the prices on
later-model, good condition used cars in southern Florida and the
surrounding states will skyrocket. As the demand by Cubans for U.S. cars
grows, the existing prices of these vehicles, already on the upswing,
would trend upward unless more used cars come on the market.

CUBAN TRANSLATORS

At $38,000 per year, Spanish translator salaries are currently lower
than 34 percent of job postings nationwide, according to job search
website Indeed.com. If the U.S. relaxes its embargo on Cuba, those
salaries are likely to fall.

Cuban entrepreneurs are allowed to offer document translation services
by their government. Thus, with Cuba's lower cost of living and relaxed
trade barriers, companies can hire lower-priced Cuban-English speaking
translators to cut costs. Should this trend grow, it would place further
downward pressure on the already low-salaried translator jobs.

CUBAN TOURISM

Americans are already drifting into Cuba via Canada, Mexico, Europe and
other countries. If it were easier to visit Cuba from the U.S. via
cruise ships, airline flights and travel packages, this tourism
opportunity might afford adventurous U.S. citizens with greater low-cost
vacation options.

Cuba is only 90 miles off the coast of Florida, a short boat or plane
ride. With Cuba's low prices and beautiful scenery, U.S. tour companies
could profit handsomely by marketing visits to the island. Closer to the
U.S. than the expensive island of Hawaii, U.S. tourists stand to benefit
from lower-priced exotic vacation opportunities to visit Cuba.

VACATION HOMES

Anyone who's tuned in to watch HGTV network's "Caribbean Life" or
"Beachfront Bargain Hunts" understands there is demand for a vacation
home in an exotic location. If buyers who ordinarily would have sprung
for a lower-cost beachfront home on the Texas panhandle or Florida coast
choose a lower-priced option in Cuba, that could cost a sale on U.S.
beachfront property.

Although not technically an import, the additional supply of beachfront
homes in Cuba might put downward pressure on comparable U.S. beachfront
vacation homes.

CUBAN SUGAR

Today, raw sugar is one of Cuba's largest exports. However, if Cuban
sugar is imported by the U.S., consumers might not see much price benefit.

Sugar prices have been falling for years and are currently as low as
they were in the 1980s. As of January 2016, U.S. producers receive 25.76
cents per pound for unrefined sugar. From 2010 to 2013, U.S. raw sugar
prices fell 50 percent due to the influx of sugar imports from Mexico
flooding the marketplace. This led to a surplus ratio of 20 percent.

Should Cuban sugar enter the U.S. marketplace, this will hurt the U.S.
sugar producers who will be forced to compete with additional cheaper
sugar imports. Although U.S. sugar producers would experience declining
profits if the trend continues, U.S. consumers likely won't feel the
benefit of the lower sugar prices, as grocers and food manufacturers
rarely pass along their price savings.

Source: 9 things you'll want if Cuban embargo ends; rum, cigars and more
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