The Cigar Association of America (CAA) made its case against proposed U.S. tariffs on premium cigars this week, with President Scott Pearce testifying before the federal government’s Section 301 Committee during what was the final public hearing on a proposed tariff schedule. The proposal would impose a 12.5% tariff on imports from most cigar-producing countries.
During his testimony, Pearce argued that premium cigars should be exempt from the tariffs, saying they meet the Administration’s criteria for products that cannot be produced domestically at the necessary scale and whose inclusion would have little impact on broader trade goals.
According to the CAA, nearly 99% of large cigars sold in the U.S. are imported, with Honduras, the Dominican Republic, and Nicaragua accounting for more than 98% of the market. Pearce also argued that higher tariffs would increase prices for consumers while placing additional pressure on retailers, U.S. tobacco farmers, and federal excise tax revenue.
“It was important to be present in-person to explain the nuances of the supply chain, how cigars are made and come to market,” said Pearce. “Higher tariffs increases the cost for specialty retailers, small businesses, and puts the components that are produced in the United States at risk.”
The Section 301 Committee will now consider testimony submitted during the hearing before making its recommendations on the proposed tariff schedule.
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