When politicians talk tough on trade, they usually promise to protect American jobs. But sometimes those gestures do the opposite. The Trump administration’s proposed 100 percent tariff on large cigars imported from Nicaragua is a case in point. According to my latest research, the tariff would shrink US GDP by $1.26 billion, reduce total output by $2.06 billion, eliminate nearly 18,000 jobs, and cost state and local governments $95 million in tax revenue.
There is no domestic industry to protect. The United States produces almost no large cigars, which are rolled by hand from long tobacco leaves and sold through tobacconists, cigar lounges, and small brick-and-mortar shops. Roughly 60 percent of all 430 million cigars imported each year come from Nicaragua. Doubling landed import costs would devastate the 3,500 retailers and 50,000 workers whose livelihoods depend on that trade.
Worse, this tariff reverses one of the administration’s genuine policy successes—its early effort to limit the Food and Drug Administration’s overreach into small-batch cigars and other low-risk nicotine products. It also repeats the same arbitrary logic behind the FDA’s recent warning letter to NOAT—a Swedish company selling mild, recyclable nicotine pouches already cleared for sale in Europe. In both cases, symbolic toughness trumps scientific and economic sense.
Hellbound and Down 