By Erica E. Phillips and Arian Campo-Flores

Florida Gov. Rick Scott threatened in his proposed budget to cut off funding for improvements at the state's ports if they pursued deeper trade ties with Cuba.

The budget bars $177 million in seaport funding from being put toward projects that "result in the expansion of trade" with Cuba, and comes after Mr. Scott said in a series of tweets last week that he opposed plans by ports in Palm Beach and Fort Lauderdale to sign agreements with visiting Cuban delegations.

Mr. Scott's budget is the latest blow to hopes among many U.S. businesses, ports and transportation firms that the loosening of sanctions in the final days of President Barack Obama's administration would quickly result in a U.S.-Cuba trade boom. The Cuban delegation's visit, which also included trips to ports from Houston to Virginia, was planned before November, when many officials and business leaders in both countries assumed ties between the two countries would continue to warm if Hillary Clinton were elected.

Instead, administrative work to license firms seeking to do business in Cuba came to a virtual halt after the election, as officials and businesses in both Cuba and the U.S. wait to see what policies President Donald Trump will put forward. It is unclear what -- if anything -- the port authorities' meetings with Cuban leaders this month will achieve until the Trump administration clarifies its plans, said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.

"Most companies that are engaged with Cuba are generally preparing for the worst and hoping they're wrong," Mr. Kavulich said.

Late lastweek, after the governor's tweets, both the Palm Beach and Fort Lauderdale ports said they wouldn't sign planned memorandums of understanding with the Cuban delegation. The Virginia Port Authority signed a cooperation pact with the Cuban National Ports Authority this month aimed at fostering Virginia's agriculture exports to Cuba. The Virginia ports operate under the direction of Gov. Terry McAuliffe, a Democrat.

A spokeswoman for Mr. Scott wrote in an email that "while the governor does not support doing business with the Castro regime, ports receive state funding and private businesses do not."

The delegation visit came alongside the arrival of the first commercial commodity directly exported to the U.S. from Cuba in more than five decades: two 20-ton containers of artisanal charcoal that landed at Port Everglades in Fort Lauderdale last Tuesday.

Scott Gilbert, managing director of Reneo Consulting, whose subsidiary struck the charcoal deal, said the producers of the charcoal were private cooperatives in Cuba, not the government, and that the deal followed "the letter of the law."

The artisanal charcoal was made by burning an invasive plant that clogs the island's agricultural fields. Buyers in Europe have snapped up the product for years, using it for pizza ovens, breadmaking and gourmet cooking, Mr. Gilbert said.

Mr. Gilbert said Mr. Scott's opposition to doing business with Cuba shouldn't affect future shipments of the product, but that he worried the governor's statements could make port officials anxious.

Sebastian Bussert, chief executive of Fogo Charcoal in Hialeah, Fla., which is distributing the Cuban product, said there is a market for high-quality charcoal. It is for "people who are particular about barbecue, not your everyday Joe who has a gas grill," he said. "I would like to continue buying it. I think it's great stuff."

Write to Erica E. Phillips at erica.phillips@wsj.com and Arian Campo-Flores at arian.campo-flores@wsj.com

(END) Dow Jones Newswires

January 31, 2017 19:45 ET (00:45 GMT)

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