Yesterday, President Donald Trump put into effect reciprocal tariffs with over sixty countries worldwide. Some had already been in effect such as Mexico, Canada and China with China’s tariffs being increased from 20% to 54%. Before I get into the rest of the tariffs in other countries, I want to stop right here for one important reason.
I have spoken to several of the accessory manufacturers who are all in battle strategy mode. The reason being that almost all of their products are made in China. Lighters, cutters, humidors, ash trays and anything else I didn’t mention are all made in China, which means their products just went up 54%. That is a huge change for the companies and most likely the consumers who will feel it at the register. Most of the company’s I spoke with said they were working on strategy in pricing but wanted to know; How long is this going to be in effect? Is this long term? Is this a short term measure to make a point by the Trump administration? The reality is, no one really knows the real answer. But in the meantime for the foreseeable future prices are jumping up.
The second part of this is the rest of the tariffs that were set in place yesterday. The White House introduced a sweeping trade policy shift, set to impact the premium cigar industry among others. Starting April 5, 2025, at 12:01 a.m. EDT, a 10% tariff will apply to all goods entering the United States. A second phase, effective April 9, 2025, at 12:01 a.m. EDT, will impose additional reciprocal tariffs on countries with higher tariffs or trade barriers against the U.S., calculated at half the value of those barriers.
For key cigar-producing nations, the reciprocal tariffs vary:
- Dominican Republic and Honduras: 10% (matching the universal rate).
- Nicaragua: 19% (reflecting its 36% tariff on U.S. goods).
- Costa Rica: 10% (despite a 17% tariff on U.S. goods).
- Mexico: USMCA-compliant cigars remain at 0%, but non-compliant goods face a 12% tariff if existing fentanyl/migration measures lapse.
These tariffs, tied to a national emergency declaration over trade deficits, will persist until the President determines the underlying issues are resolved, with flexibility for adjustments based on trading partners’ responses.
It is unclear how much this will effect prices of cigars, meaning if the brands pass all of that cost along to the consumer or try to offset it hoping to not scare customers aware if these end up rolling back. Especially those coming from Nicaragua who out of the cigar nations has the highest percentage at 19%. Going into the trade show next week, I suspect most manufacturers will be trying to get their products imported as soon as possible to avoid the increase if they have not done so already. Some may chose to eat the cost and hope this isn’t a long term problem, such as those in the Dominican Republic where the tariff is only 10%. Others I suspect will most definitely raise prices, especially those in Nicaragua. I think who raises prices and how much will depend on the manufacturer. My warning either way to the consumer is be prepared and start buying your cigars now. Either way – things are going to get more expensive. If you need a new cutter and lighter – I would suggest grabbing a few now at your local shop.
As I said before, it is uncertain how long these will stay in place if they aren’t permanent. Time will tell but until then be ready to spend more. Even if they do not stay long term, that does not stop prices from rising steeply and staying there regardless of the future anyway.
