Three Tariff Regimes in Six Months: What 2026 Has Meant for Cigar Importers

A cigar that crossed the border in January, another that crossed in April and a third that crossed last week each paid a different set of duties. None of the three was affected by a change in tobacco law. All of the movement came from trade law, and it came fast. For an industry that buys leaf years ahead and sets retail prices once a year, that pace is the real problem.

This article sorts the three regimes in order, explains how they interact with CAFTA-DR, and closes with the questions every importer of record should be able to answer today.

The first regime: IEEPA, and the refund queue it left behind

On February 20, 2026, the Supreme Court decided Learning Resources, Inc. v. Trump, holding six to three that the International Emergency Economic Powers Act does not give the President power to impose tariffs. The Court did not order a particular remedy. It left that to the agencies and the Court of International Trade.

Collection stopped on February 24, 2026. CBP then built a refund process, called CAPE, that runs through the ACE portal. To use it, an importer needs a working ACE account, refund banking details on file for ACH payment, and a declaration listing the entries it is claiming. CBP opened the process in phases: first for unliquidated entries and recently liquidated ones, then for reconciliation entries, and on October 6, 2026 for finally liquidated entries.

That third phase carries the catch. CBP's position is that it cannot reliquidate a finally liquidated entry without a court order directed to that importer. In practice, that limits the newest phase to importers who have sued in the Court of International Trade and are covered by an order there. A government appeal of the court's broader refund order is pending at the Federal Circuit, and a motion to certify a class of importers has been argued but, as far as public reporting shows, not decided.

Many cigar importers are small companies, and ACE access is a recurring weak point. An importer whose broker has always handled ACE may find that the refund process expects the importer itself to have an account and banking details in place. That is an administrative problem, but it is the one most likely to delay money that is otherwise owed.

The second regime: a 150-day surcharge under Section 122

The same day the Court ruled, the President proclaimed a 10% surcharge on imports from all countries under Section 122 of the Trade Act of 1974, a provision written for balance-of-payments emergencies. It took effect February 24, 2026. The exemptions covered USMCA goods, goods subject to Section 232, a list of specific tariff lines and CAFTA-DR textiles. Cigars were not on the exemption list, and the Premium Cigar Association treats the surcharge as one of the phases cigar importers paid.

Section 122 limits such a surcharge to 150 days unless Congress extends it. Congress did not, and the surcharge ended July 24, 2026.

Its legality is still in court. On May 7, 2026, the Court of International Trade held the surcharge unlawful in State of Oregon v. United States, but limited relief to three named plaintiffs. The Federal Circuit stayed that judgment on June 11, finding the government likely to succeed. There is no CAPE equivalent for Section 122 duties. Importers who want to keep a refund claim alive have to use the ordinary tools, such as post-summary corrections before liquidation and protests after it.

The third regime: Section 301 and forced labor

The measure that matters most today took effect at 12:01 a.m. Eastern on July 24, 2026, the day the Section 122 surcharge expired. USTR concluded Section 301 investigations into sixty economies' failure to prohibit imports of goods made with forced labor, and imposed additional duties. For the countries that make most premium cigars sold in the United States, the rates are:

USTR's notice does not exclude tobacco or cigars, and it sets no end date. It does exclude goods subject to Section 232, which matters for packaging and is discussed below.

Why CAFTA-DR does not help with the forced labor duty

A common question is whether CAFTA-DR protects Dominican and Honduran cigars. For the normal duty, it does: an originating cigar still enters at zero. For the forced labor duty, it does not. The only CAFTA-DR carve-out in USTR's forced labor action covers duty-free textile and apparel goods. A qualifying Dominican cigar pays nothing under the regular tariff schedule and 12.5% under Section 301.

Nicaragua is the one place CAFTA-DR still does real work. In December 2025, USTR concluded a separate Section 301 investigation into Nicaragua's labor and human rights practices. That tariff is 0% for 2026, rises to 10% on January 1, 2027 and to 15% on January 1, 2028. But USTR wrote it so that it does not apply to goods that originate in Nicaragua under CAFTA-DR. A Nicaraguan premium cigar that meets the origin rules is outside the Nicaragua tariff, though not outside the forced labor tariff described above.

That makes origin documentation more valuable than it has been in years. Leaf sourcing, the location of each manufacturing step and the records that prove them now decide whether a Nicaraguan cigar faces one Section 301 duty or two from 2027 on.

Packaging is its own question

Cigar packaging crosses the border too, often separately from the cigars. Section 232 tariffs on steel and aluminum reach many derivative products, and Section 232 tariffs on timber, lumber and wood derivatives were imposed in 2025 and amended in January 2026. Whether a particular aluminum tube or cedar box falls within a derivative list depends on its tariff classification, so check the HTS line for each item rather than assuming. Because goods subject to Section 232 are excluded from the forced labor duty, the two do not stack on the same item.

What has not changed: excise tax

None of this touched federal excise tax. Large cigars still pay 52.75% of the sale price, capped at 40.26 cents per cigar, and small cigars pay $50.33 per thousand under 26 U.S.C. § 5701. A bill introduced in March 2025 would move large cigars to a per-pound rate with a per-cigar minimum, but it has not moved out of committee.

Questions to answer now

These are the points I would want any importer of premium cigars to have settled before year end:

• Which of your 2025 and 2026 entries carried IEEPA duties, and where does each one sit in liquidation?
• Does your company, not only your broker, have ACE access and refund banking details in place?
• If you have finally liquidated entries, are you relying on someone else's lawsuit, and is that a decision or a default?
• Are you preserving Section 122 claims through corrections or protests, or have you decided not to?
• Is your country of origin and CAFTA-DR documentation strong enough to support each entry, especially for Nicaraguan product from 2027?
• Have you checked the classification of tubes, boxes and other packaging against the Section 232 derivative lists?

The pattern of 2026 is that the duty on a cigar is now set by trade policy that has nothing to do with cigars. The companies that come through it best will be the ones that treat customs records with the same care they give to blending.