Cigar Tariffs on Local Cigar Business

DANA BINFET, HOST:

The president’s tariff plans have been changing quickly, and it’s been hard for many small businesses that depend on imports  to keep up. Uptown radio’s Zhuoya Ma checks in with one Manhattan business owner to see how he’s coping. 

MA: Jesus Martinez runs the family’s business, Martinez Handmade Cigar, just a few blocks south of Madison Square Garden. His father founded the store more than five decades ago after coming from the Dominican Republic as a teenager. 

MARTINEZ: “And he got the opportunity to come to the United States, and basically, this is the only thing he knew how to do, roll cigars, so he decided to open up in New York.” 

Martinez Handmade Cigar store looks from the outside. Credit: Zhuoya Ma

Juses Martinez (on the left) and his father, the founder (on the right). Credit: Zhuoya Ma

MA: Martinez’s store operates as both a factory and a wholesaler. The space is tiny. On the left, four employees sit, rolling cigars and smoking them while working. On the right, there’s a glass showcase full of their handiwork. Martinez says they use imported tobacco leaves from the Dominican Republic, which now faces a 10% tariff, but he’s not that worried.

The employee is rolling cigars. Credit: Zhuoya Ma

MARTINEZ: “What's going to happen is if the importer gets to pay the 10%, he's going to pass that 10% to me, and I'm going to have to pass the 10% to the consumer.”

MA: To make cigars, Martinez imports raw material from countries that face different tariffs. Mexico is facing 25% and Nicaragua was set to face an 18% tariff. But then, eight days ago President Trump paused those tariffs for 90 days, reducing the tariffs that Martinez would have had to pay for Nicaragua and tobacco leaves from 18% to 10%. Martinez sells his cigars for about ten to fifteen dollars each so he doesn’t think the extra cost will turn away his customers. 

MARTINEZ: “If you want to smoke a cigar, you're just going to smoke a cigar. You want a dollar more or the same price or two dollars, people are going to smoke.”

Don Antonio series of Cigar is welcomed by consumers. Credit: Zhuoya Ma

MA: His last, pre-tariff order gives him enough stock to last for a couple of months.

Wolf is a regular customer here. He’s sitting on an easy chair and puffing on the store’s well-known Robusto cigar. We’re not using his real name because he works in the import/export business. He’s not from the U.S. and doesn’t want to anger his customers. He has been smoking cigars for 26 years. 

WOLF: "You take a break with a cigar. You stop everything that you're doing. You sit down, you smoke, you and your thoughts, and the cigar. You cannot do other things when you're smoking a cigar. “

MA: It’s not just tariffs on tobacco leaves. Cigars, made in other countries and imported may also face additional taxes. But Wolf is very chill about the idea. He makes high-end loudspeakers and moves components from country to country. For him, paying an extra dollar or two is not a big deal. But he realizes that it may be for other customers and big picture, he’s not happy about Trump’s constantly shifting plans.  

WOLF: “I think any business decision, whether it's tariff or other regulation that is made based on mutual understanding, fair negotiation, in good faith, should be accepted by us as business people, as consumers. But again, this era, these times, don't look to me very rational.”

MA: For the store owner, Jesus Martinez, it’s business as usual. He says that includes tariffs and taxes.

MARTINEZ: “Every time the taxes go up, unfortunately, you have to pass it down to the consumer.”

MA: He’s open for smokers, seven days a week as long as his customers don’t mind paying an extra dollar or two. 

Zhuoya Ma, Columbia Radio News.