For years, a box of premium cigars from the Dominican Republic, Nicaragua or Honduras crossed the U.S. border essentially duty-free. In under 16 months that changed four times: emergency tariffs, a Supreme Court reversal, a temporary surcharge, and now a long-term duty with no end date. Here is how we got here, what each change cost, and what a cigar shop should watch next.
General information only, not legal or tax advice.
Four tariff regimes in 16 months
What each origin has paid
The three countries that make nearly all U.S. premium cigars have been treated differently at every step. The bars show the added U.S. tariff rate in each phase.
Rates are the added tariffs from each action. Nicaragua's separate December 2025 Section 301 schedule is not shown because CAFTA-DR-qualifying goods, which include most premium cigars, are exempt.
Same kind of cigar, different border: Honduras now pays 2.5 points less than its two biggest rivals.
That gap matters. Honduras was already gaining ground before the new tariffs: in the first quarter of 2026 it shipped more premium cigars to the U.S. than the Dominican Republic for the first time on record. A lower tariff tier gives Honduran production a small but lasting cost edge.
Nicaragua, still the largest source at about 60% of U.S. premium imports, paid the highest rate under the 2025 emergency tariffs. It now pays the same 12.5% as the Dominican Republic.
How a tariff reaches your shelf
The importer of record, usually the manufacturer's U.S. company, pays the duty at the border. It is charged on the cigars' declared import value, not on the retail price, so a 12.5% tariff does not mean a 12.5% higher shelf price. Companies pass the cost down in different ways: list-price increases, separate import surcharge lines on invoices (as STG does), or both.
There is also a knock-on effect. States that tax cigars as a percentage of wholesale price, including North Carolina, collect more excise tax when invoice prices rise.
Money coming back, but not to retailers
After the Supreme Court ruling, U.S. Customs began refunding IEEPA tariffs through a new claims process, and as of September many claims are still working through Customs and the courts. Refunds go to the importer of record, not to the distributors and shops further down the chain. If the appeals court upholds the ruling against the Section 122 surcharge, those duties could be refunded to importers too. STG has said it will drop its import charge if the tariffs are removed.
Four things to watch
The tariff playbook
- Reprice as new stock arrives, not all at once. Cigars you already own were bought at the old cost.
- Read the invoice lines. Surcharges can appear separately from list prices, so track your true landed cost per box.
- Balance your humidor by origin. Strong Honduran lines now carry a lower tariff than comparable Dominican or Nicaraguan ones.
- Buy ahead of announced increases on your steady sellers, especially going into the holidays.
- Pending: appeals court decision on the Section 122 surcharge
- January 1, 2027: Nicaragua Section 301 rate for non-CAFTA-DR goods rises to 10%
- March 5–8, 2027: PCA trade show, Las Vegas, where manufacturers usually set new-year pricing and releases
We pass manufacturer price and surcharge changes along as they reach us, not before. If you want a heads-up before increases on the lines you carry, or want to stock up on steady sellers ahead of the holidays, talk to your Big Distro sales contact. For the short version of this story, see our cigar tariff briefing.
Sources: USTR – forced-labor Section 301 action (Jul 23, 2026) · USTR – Federal Register notice · USTR – Nicaragua Section 301 (Dec 2025) · Premium Cigar Association – tariff phases · Cigar Rights of America – Section 301 · Cigar Rights of America – CIT Section 122 ruling · WilmerHale – Supreme Court IEEPA ruling · KVIA – IEEPA refund status · halfwheel – STG price increase · Humo Latino – Nicaragua & CAFTA-DR · Global Trade Alert – final action overview
Photos: Unsplash (Rusty Watson, Trent Haddock, Alek Olson).