How Trump's tariffs impact cigars

President Donald Trump announcing universal tariffs in what he has called "Liberation Day"

In early April, President Trump introduced a sweeping tariff policy that is expected to significantly impact countries involved in premium cigar production. A universal 10% tariff on all imports took effect on April 5, with even steeper, reciprocal tariffs targeting nations with substantial trade deficits with the U.S. set to begin on April 9. Addressing the development on Truth Social, Trump remarked, “Countries around the world are engaging with us. We’re establishing tough but fair terms.”

The Premium Cigar Association (PCA), a Washington, D.C.-based trade group representing specialty tobacco retailers and manufacturers, has voiced concerns about the economic strain these tariffs could place on the industry. “We’re actively monitoring the situation and working closely with stakeholders to protect the strength of the premium cigar market in the United States,” said Joshua Habursky, PCA’s executive director. “We believe the administration recognizes the vital role small businesses play in communities across the country, and we remain optimistic about easing cost burdens on producers, retailers, and consumers. The U.S. is a global leader in premium cigar retail, and we intend to maintain that position.”

PCA detailed the tariff breakdown for countries central to the U.S. cigar supply chain. The Dominican Republic, Honduras, and Costa Rica are now subject to the base 10% tariff, while Nicaragua faces an 18% rate. Mexican cigars that comply with the USMCA agreement remain exempt, but non-compliant imports could see a 12% tariff if current agreements related to fentanyl and migration expire.

Tobacco field in Esteli, Nicaragua

Rob Burgess of Connector Inc., who represents PCA in government affairs, emphasized the association’s commitment to supporting the industry. “The premium cigar sector plays a critical role in supporting American small businesses and consumer choice,” Burgess said. “Our team is working diligently with government officials and industry stakeholders to address the consequences of these tariffs. Our priority is to reduce financial stress on the supply chain while preserving U.S. leadership in the premium cigar market.”

Ultimately, the industry as a whole is on edge to see how it will shake up demand and pricing. Thousands of small businesses across the United States rely on fair pricing on premium cigars and are hesitant to pass on rising costs to consumers.