The Tariff’s the Thing
By Brian Desind, Cigar Public
Let’s talk cigars. Real ones. The kind rolled in sweat-soaked factories by hands that know leaves better than most people know their own skin. The kind you light up at 1 a.m. on a rooftop or a back porch while contemplating something between everything and nothing.
And now, let’s talk about how they’re about to cost more.
Because while cigar culture is built on romance, craftsmanship, and history, it’s still shackled to the unforgiving gears of global trade.
Last week, Washington made its move—new tariffs, the kind that ripple down from international policy meetings and wind up smacking the ashtrays of American cigar smokers. The headlines didn’t scream about it. No, this was a quiet sort of punch, one that landed while the industry was looking elsewhere—dealing with a fire at the AJ Fernandez factory in Nicaragua, distracted by business as usual.
But here’s the deal: as of April 5, a 10% universal tariff took effect on nearly everything imported into the U.S. By April 9, countries like Nicaragua got slapped with something extra. For them, it’s 19%. And no, it’s not additive—it’s inclusive. Still, 19% is nothing to shrug off when you’re importing millions of dollars’ worth of product.
This isn’t a finance report, and I’m not your accountant. But if you smoke cigars—or sell them—you need to understand how this works. Because this little number, 19%, is going to find its way into your humidor one way or another.
Let’s say a cigar manufacturer brings in a stick with a declared import value of $5. A 19% tariff on that? That’s 95 cents. The cigar now costs the company $5.95 instead of $5.
That increase flows downstream. Most cigars are priced using keystone markup—meaning the wholesale price gets doubled at retail. So the $5.95 wholesale cigar becomes $11.90 on the shelf.
Now layer in local taxes. Take Atlanta for example:
- Georgia tobacco tax: 23% of wholesale price
- Georgia sales tax: 8.9% of retail price
Pre-Tariff:
- $5.00 wholesale → $10.00 retail
- $1.15 state tobacco tax (23% of $5)
- Advertised price: $11.15
- After 8.9% sales tax: $12.14 at the register
Post-Tariff (19% increase = $5.95 wholesale):
- $5.95 wholesale → $11.90 retail
- $1.37 state tobacco tax (23% of $5.95)
- Advertised price: $13.27
- After 8.9% sales tax: $14.45 at the register
That 95-cent tariff? It ended up costing the consumer $2.31.
In states like Florida or Pennsylvania—where cigar taxes are nonexistent—the impact is less dramatic. But in most places? This isn’t just a minor bump. It’s a reality shift.
And here’s the kicker: retailers have no idea what the original import tariff was. They just see a new price sheet. Some manufacturers will play fair. Others might see this as an opportunity to slip in a little extra margin while everyone’s distracted.
And don’t forget—tariffs are based on the direct import value. Which means cigar companies without their own factories now have a clearer look at what their competitors are paying. It won’t be long before someone figures out they’re being charged more than the next guy.
This moment isn’t just about costs. It’s about clarity. And disruption.
Most manufacturers aren’t even thinking about a recession yet. They’re still catching up, scrambling to understand if these tariffs are temporary political leverage or here to stay. Most didn’t even have time to stockpile inventory before the effective dates hit.
For some of us, this all feels familiar. Back in 2009, the SCHIP tax almost crippled the industry. People said it would be the end. It wasn’t. Cigars kept coming. Imports grew. The culture survived.
This moment will pass too. But cigars are going to cost more—there’s no way around it.
So light up your next one with that in mind. Not in fear, but in understanding. Because even as the price climbs, the ritual stays the same. And for some of us, that’s still worth every penny.
Editor’s Note (Added April 6, 2025):
A quick note of respect and clarity: Charlie Minato’s recent article on halfwheel (“Cigar Companies Say Tariffs Won’t Change PCA 2025 Deals…”) brought much-needed attention to how new tariffs could affect cigar pricing. His breakdown of the numbers was one of the first clear efforts to help the industry and consumers grasp the impact. Our piece was directly influenced by that framework—we used a similar pricing structure, but applied what we believe to be a more realistic $5 import cost to show how the impact scales. Credit to Charlie for opening the door to this important conversation.
