A country 90 miles off the Florida coast is openly saying war could be next.
The U.S. is sanctioning its officials, and reports say Cuba has hundreds of drones from Russia and Iran. Markets are not pricing this in yet.
Cuban President Miguel Diaz-Canel called U.S. sanctions "immoral, illegal, and criminal" in a post on X. That was his sharpest language yet.
On Monday, the U.S. slapped sanctions on 11 Cuban officials and Cuba's main spy agency. That came on top of an order from President Trump that threatens tariffs on any third party selling oil to Cuba.
The campaign has been an oil blockade in everything but name since January. Cuba's main oil supplier, Venezuela, was cut off after President Nicolas Maduro was seized in a military operation.
Cuba's fuel is running dry. Diaz-Canel said the country would "continue to denounce, in the firmest and most energetic way possible, the genocidal siege that seeks to strangle our people."
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Axios reported Sunday, citing classified intel, that Cuba has more than 300 military drones from Russia and Iran. The report said Cuban officials had begun talking about using them to strike U.S. targets.
The named targets included the U.S. naval base at Guantanamo Bay, U.S. military ships in the region, and possibly Key West, Florida. Key West sits about 90 miles from the Cuban coast.
Diaz-Canel said on Monday that U.S. threats of military action against Havana were well known. If those threats turned real, he said, "it would trigger a bloodbath with incalculable consequences."
Trump has floated what he called a "friendly takeover" of Havana. He has also said the U.S. could turn its attention to Cuba after the Iran war and could do anything he wanted with the country.
Ahead of his trip to meet Chinese President Xi Jinping last week, Trump pledged on Truth Social to hold talks with Cuban officials, without offering details. He has previously urged the country to make a deal "before it is too late."
Cuba's foreign minister Bruno Rodriguez Parrilla wrote on X that the U.S. "builds, day after day, a fraudulent case to justify the ruthless economic war against the Cuban people and the eventual military aggression."
Jorge Mas, chairman of the Cuban American National Foundation, told CNBC's "Squawk Box" that he thinks regime change in Havana is months away. "Threats are to be taken seriously, but at the end of the day the destiny of Cuba is not going to change," he said.
Cuba's foreign minister has said the country neither threatens nor desires war. Even so, two governments are now talking openly about a clash.
The Caribbean has been quiet for a long time, and that quiet is showing signs of breaking.
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