Dollar and extraterritorial jurisdiction as weapons: How US sanctions are intensifying pressure on Cuba

Editor's note: Zhou Jianjun is an associate research fellow at the CEEC Economic and Trade Cooperation Institute of Ningbo University. This article reflects the author's opinion and not necessarily that of CGTN.

On May 1, 2026, US President Donald Trump signed Executive Order 14404, further escalating sanctions against Cuba. Unlike the military operations previously launched against countries such as Venezuela and Iran, the US strategy toward Cuba has shifted from direct attacks to economic blockade and containment. By targeting key sectors including energy, minerals, and financial services, Washington seeks to cut off all of Cuba's sources of revenue. According to a report by Bloomberg on August 14, the Trump administration has increasingly prioritized economic sanctions and pressure over military options in its approach to Cuba, with the strategy reportedly "aimed at creating fractures in the ranks and room for negotiation." This does not represent a gesture of restraint by Washington. Rather, it reflects a form of "low-intensity confrontation" in which the United States leverages the global influence of the US dollar and its system of extraterritorial sanctions as tools of pressure. Cuban Foreign Minister Bruno Rodríguez said that the long-standing US blockade has caused Cuba cumulative losses of $178.7 billion. Between March 2025 and February 2026 alone, the losses reportedly reached a record $8.083 billion. No bombs, only blockade. Behind these words lies a harsh reality: A country is being subjected to systematic economic pressure.

Using dollar dominance and extraterritorial jurisdiction to impose financial coercion on Cuba

The core instrument in this "low-intensity confrontation" is not military force, but the US dollar. After designating Cuba as "a state sponsor of terrorism," the United States restricted Cuba's access to dollar-based financial transactions. Given the dominant role of the dollar in the international payment system, almost every cross-border transaction involving dollars requires processing through US financial institutions or correspondent banks. Washington has just leveraged this critical position to weaponize the financial infrastructure, monitoring, blocking, and even freezing dollar transactions linked to Cuba as well as imposing staggeringly high penalties on foreign banks and companies conducting business with Cuba. Executive Order 14404 further authorizes secondary sanctions against foreign financial institutions that conduct or facilitate significant transactions with Cuba. This means that any Chinese or European company engaging in transactions with Cuba could be subject to US sanctions simply because the transaction is settled in US dollars, even when the transaction has no connection to the United States. Through such extraterritorial measures, the US imposes its domestic regulations beyond American borders, placing unprecedented financial pressure on Cuba.

Targeting basic livelihoods: Sanctions increase political pressure on Cuban government

The logic behind US economic sanctions is straightforward: Instead of dropping bombs, it seeks to exert pressure by restricting access to medicines for hospitals, fertilizers for farms, and fuel for the power grid, plunging ordinary people into hardship and potentially fueling social discontent that could force a change of government in Cuba. Cuban President Miguel Díaz-Canel said on July 20 that over the previous six months, apart from a Russian tanker carrying humanitarian supplies, no fuel shipments had arrived in Cuba. On August 3, Cuba experienced a nationwide power outage, the second island-wide blackout within 24 hours. Under the impact of long-standing US sanctions, Cuba has faced persistent challenges in maintaining essential supplies, with reports citing growing humanitarian concerns. Infant mortality has reportedly doubled to 9.9 deaths per 1,000 live births, while the survival rates of children with cancer have fallen from 85% to 65%. The use of sanctions to pressure the Cuban government and the weaponization of humanitarian issues have not only failed to achieve the intended goals, but also undermined the United States' moral standing, drawing humanitarian criticism from countries around the world.

The backlash of sanctions: US exports, employment, and global trust also face costs

Economic blockades are never cost-free for the imposer. Although Cuba is a small economy, it has historically been a nearby market for US agricultural and industrial products. Southern US agricultural states once had the potential to become key suppliers of grain to the Cuban market, but long-standing sanctions and trade restrictions have pushed them out, leaving opportunities to competitors from other countries. The long-term embargo has also cost American farmers, port workers, and exporters access to a nearby market with stable demand, incurring great losses in employment and export growth. Moreover, financial sanctions and extraterritorial jurisdiction have come with high costs for the imposer. The United States must devote substantial resources to screening transactions, tracking financial flows, and monitoring the movement of goods—resources that could have been put to more productive uses elsewhere. More importantly, the use of the dollar-based financial system as a tool of sanctions has prompted some countries to seek alternatives. For instance, China, Brazil, Russia, and other economies have explored expanding local-currency settlements and alternative payment mechanisms. As the United States weaponizes dollar-based settlements, an increasing number of countries are beginning to question whether a currency that can be used as a tool for political sanctions and financial coercion can continue to command global trust. Each round of financial sanctions against Cuba serves as a reminder to the international community that, if Washington chooses to do so, Cuba could be targeted today, and other countries could face similar pressure tomorrow. This is not merely alarmism, but a potential consequence that cannot be ignored. The abuse of dollar dominance and extraterritorial sanctions are gradually undermining not only US economic interests, but also global confidence in the United States. Economic coercion can have a boomerang effect: Those who deploy such tools may ultimately suffer the consequences themselves. (Cover via VCG)