In the ongoing trade war between the US and countries around the world, the 28 state European Union announced retaliatory import tariffs on a number of US products. One of those products is cigars coming from US based companies. The EU has declared it will impose a 25% import tariff on cigars in retaliation for the US “carbon and alloy” tariff recently imposed.
This tariff is on top of the already high Value Added Tax (VAT) that is imposed on purchased good and products. The cigar tariff is one of 340 tariffs that the EU has imposed on US products including such items as grain, bourbon, orange juice, clothing, appliances and construction materials. You can see the complete list of EU retaliatory tariffs here.
In recent years the EU cigar palates have begun shifting to non-Cuban cigars and many US brand owners have been capitalizing on this and marketing to the EU as a way to offset the impacts of the US FDA regulations. Even though there are strict regulations in the EU for tobacco products, manufacturers and brand owners can still introduce new blends and product lines, without paying for blend approvals and being subjected to the long FDA approval process.
Time will tell how this move will impact the US brand owners, but it is clear that 25% hits the price of cigars pretty hard, making them less affordable in comparison to Cuban cigars. Will the new found love for non-Cuban brands be enough? Only time will tell.