If you’ve been following the news over the past year, you know trade policy has been about as stable as a loose foot on a torpedo. For most industries, tariff talk is dry, bureaucratic noise. For us it landed right at the humidor. Rates changed, courts stepped in, rates changed again, and if you gave up trying to follow it somewhere around last summer, I don’t blame you.
So let me catch you up properly. This is what happened, what the Supreme Court did about it, what replaced the surcharge on July 24, and what you’re actually paying today.
- The 2025 trade war hit cigars hard. Nicaragua faced an 18 percent reciprocal tariff while the Dominican Republic and Honduras paid 10 percent, and every layer of it got voided when the Supreme Court ruled on February 20, 2026 that IEEPA never authorized tariffs at all.
- The replacement, a flat 10 percent surcharge under Section 122 effective February 24, 2026, ran out its 150-day statutory clock at 12:01 a.m. EDT on July 24, 2026. Congress did not extend it.
- New Section 301 forced-labor tariffs took over at that exact moment. Honduras and Mexico hold at 10 percent, while the Dominican Republic and Nicaragua now pay 12.5 percent. Scandinavian Tobacco Group already raised prices on most of its U.S. catalog in response, effective August 3, 2026.
HOW IT STARTED: APRIL 2025
On April 2, 2025, the administration announced a tariff overhaul that caught the cigar industry flat-footed. A 10 percent baseline on virtually everything imported into the United States, with higher reciprocal rates for specific countries stacked on days later.
For the three countries that make about 99 percent of the premium handmade cigars Americans smoke, the picture looked like this:
INITIAL TARIFF RATES, APRIL 2025
Nicaragua took the biggest hit, and Nicaragua matters most. It shipped 258.4 million premium cigars to the United States in 2025, 60 percent of everything we imported. Within hours of the reciprocal rates kicking in on April 9, the administration announced a 90-day pause that dropped Nicaragua back to the same 10 percent as everyone else. When that pause ran out in the summer, Nicaragua went back up to 18 percent. The Dominican Republic and Honduras stayed at 10.
Your accessories weren’t spared either. Chinese-made cutters, lighters, and humidors spent 2025 under stacked duties that reached 54 percent in April before climbing even higher during the U.S.-China escalation. If your favorite cutter got more expensive last year, that’s why.
Most companies that raised prices added a quarter to fifty cents at wholesale, and here’s the part nobody tells you: because most cigars are keystone priced, a wholesale increase roughly doubles by the time it reaches the register.
THE SUPREME COURT PULLS THE PLUG: FEBRUARY 2026
Just as the industry finished adapting, the legal ground gave out. On February 20, 2026, the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act, the law behind every one of those reciprocal tariffs, does not authorize the President to impose tariffs. Not these tariffs. Any tariffs. The Court said taxing imports is Congress’s power, and IEEPA never handed it over.
Every IEEPA-based rate died with that ruling. The 18 percent on Nicaragua. The 10 percent on the Dominican Republic and Honduras. The stacked rates on Chinese goods. Gone.
The administration didn’t wait a day. Within hours it invoked Section 122 of the Trade Act of 1974, a balance-of-payments tool that had been used exactly once before, by Richard Nixon in 1971. The new surcharge: 10 percent on nearly all imports, effective February 24, 2026.
You may have heard 15 percent, and here’s where it gets messy. The President announced the next day that the rate would rise to 15 percent, which is the statutory maximum. But the guidance that customs issued on February 23 confirmed collection at 10 percent, and 10 percent is the rate every court fight since has been about. What you’re paying at the border today is 10.
The accidental result is the strangest kind of good news. Nicaragua dropped from 18 percent to 10. The Dominican Republic and Honduras stayed level at 10. For the first time in this entire saga, all three major producing nations pay the same rate.
WHERE THINGS STOOD, JULY 2026
THE COURTS AREN’T DONE WITH THIS ONE
The Section 122 surcharge got about ten weeks of peace. On May 7, 2026, the U.S. Court of International Trade ruled the proclamation invalid, finding it never identified the balance-of-payments problem the statute requires. Then on June 11, the Federal Circuit put that ruling on hold while the government appeals, and it signaled the government is likely to win.
What does all that legal ping-pong mean at the border? Nothing changed. The 10 percent is still being collected on every cigar entering the country, appeal or no appeal. Importers have paid roughly $25 billion in Section 122 duties since late February across all industries, and the meter is still running.
That fight is moot now. Section 122 hit its statutory wall on July 24, 2026 before the Federal Circuit ever ruled on the appeal, and a different tariff took its place before that court fight could matter.
That is not a minor detail. That is the whole story of this trade war in one sentence: the rates keep getting struck down, and you keep paying them anyway.
Tariffs are taxes. Despite the spin, they get paid on our side of the water, and eventually at your tobacconist’s counter.
Tariffs are taxes. Despite the spin, they get paid on our side of the water, and eventually at your tobacconist’s counter.— NORM FARRAR, THE CIGAR FOSSIL
JULY 24: WHAT ACTUALLY REPLACED SECTION 122
Section 122 hit its statutory wall right on schedule. At 12:01 a.m. EDT on July 24, 2026, the 150-day surcharge expired, and Congress let it lapse without extending it.
At that exact moment, a different tariff regime took over: new Section 301 tariffs tied to forced-labor import enforcement, applied to 60 U.S. trading partners representing roughly 99 percent of everything the country imports. This is not a cigar tariff. It is an economy-wide action that happens to land squarely on the four countries that supply nearly every premium handmade cigar sold here.
The mechanism splits countries into two tiers based on whether they have committed to enforce a ban on forced-labor imports. Countries that have made that commitment pay 10 percent. Countries that have not pay 12.5 percent.
WHERE THINGS STAND, AUGUST 2026
Honduras and Mexico landed in the 10 percent tier and hold flat where Section 122 left them. The Dominican Republic and Nicaragua landed in the 12.5 percent tier, a real increase from the 10 percent they were paying the day before. Between them, those two countries shipped well over a third of the premium handmade cigars Americans smoked in 2025.
Here’s where the CAFTA-DR story needs a precise read, because it would be easy to assume it protects Nicaraguan cigars from everything now. Nicaragua’s December 2025 Section 301 action, the one that phases in at 0 percent in 2026 and excludes CAFTA-DR-qualifying goods, is still on the books. But it is a separate, narrower action from the forced-labor tariff that took effect July 24. The CAFTA-DR exclusion only protects goods from that specific December action, not from the new forced-labor rate. Nicaraguan cigars, CAFTA-DR-qualifying or not, are paying 12.5 percent right now under the mechanism that actually applies today.
SCANDINAVIAN TOBACCO GROUP MOVES FIRST
Ten days after the new rate took effect, Scandinavian Tobacco Group, which owns Alec Bradley, CAO, and Macanudo among other brands through its Forged Cigar Co. and General Cigar Co. divisions, adjusted pricing on nearly its entire U.S. catalog.
Effective August 3, 2026, more than 80 percent of STG’s roughly 750 U.S. SKUs got a wholesale price increase averaging 4.2 percent. About 100 items held their wholesale price steady. Roughly 2 percent saw double-digit jumps, the largest being the Punch Deluxe Chateau Maduro at 15.3 percent.
Separately, and this is the part that touches every single item, STG’s blanket import surcharge on every order, layered on top of wholesale pricing since last year, rose from 6 percent to 7 percent. Even the 100-plus SKUs that did not get a wholesale increase cost more going forward because of that surcharge. STG’s own leadership pointed to inflation as the main driver of the wholesale changes, not tariffs specifically, and said the import surcharge would come off if tariffs did.
WHAT THIS MEANS AT THE REGISTER
If you’ve been stocking your humidor through all of this, you’ve already felt it, and STG’s August price sheet just confirmed it in writing. When the tariffs first hit, industry estimates put the consumer cost at anywhere from 50 cents to $2.10 per cigar in a zero-tobacco-tax state, more where your state taxes tobacco. That’s $12.50 to $52.50 on a box of 25.
The real-world increases have mostly landed at the gentler end of that range so far. But here’s the thing about price increases in this business, they don’t reverse. Several manufacturers said plainly that even if the tariffs vanished tomorrow, prices would stay where they are. Retailers absorbed what they could in 2025. The rest is in your receipt.
Governments will always find new ways to complicate things. The love of a well-made cigar doesn’t negotiate with tariff schedules.
The 2025-2026 tariff saga just answered its own cliffhanger, and it’s a mixed verdict. Section 122 died exactly on schedule, and Congress let it. What replaced it is not cigar-specific and is not temporary, forced-labor Section 301 tariffs with no built-in expiration date. Honduras and Mexico caught a break holding at 10 percent. The Dominican Republic and Nicaragua, which together ship the majority of what’s in your humidor, are now paying more than they were a day before.
My read: this is not the last tariff story we’ll write this year. There is no July 24-style deadline baked into the new mechanism, so don’t wait around for another one to save you. Buy what you love. Light one up. The world can wait 90 minutes.
FREQUENTLY ASKED QUESTIONS
Common questions about the trade war, tariff rates, and what it means for your humidor.
