No matter the results of the election, this article starts with the same disclosure: there are much larger issues in America than cigars.
That said, we are a cigar blog and you come here to read about cigars—so, here’s the impact of the election on cigars.
Well, who saw that coming.
This changes everything. The belief amongst just about everyone in politics was that Clinton would win with a tightening Senate–perhaps 50-50–and a tightening House of Representatives. Turns out, that’s not the case.
For starters, any chance of the agriculture appropriations bill or omnibus including an agriculture appropriations bill is dead. The House version of the agriculture appropriations bill included an exemption for premium cigars. There was some belief that a Clinton victory would pressure the Republicans to pass an omnibus (a large bill containing numerous other bills), a minibus (smaller version of an omnibus) or individual appropriations bills in the lame duck session. That is now gone.
In the immediate future, the current Congress will pass a continuing resolution, a temporary stopgap measure that will fund the government until March of next year. They will then need to take up funding through September 2017 as well as begin to work on the next round of appropriations bills, which will fund the government through September 2018.
FDA gets its funding authorization from the agriculture appropriations bill; expect the lobbying of the House Appropriations Subcommittee on Agriculture and the larger Committee on Appropriations to continue with the 115th Congress.
Trying to gauge what stance a Trump administration would take towards the U.S. Food & Drug Administration (FDA)’s regulation of premium cigars is unknown.
Trump himself promised to “cut regulations,” though it’s unclear what those regulations will be. He said in the first debate:
When I go around — Lester, I tell you this, I’ve been all over. And when I go around, despite the tax cut, the thing — the things that business as in people like the most is the fact that I’m cutting regulation. You have regulations on top of regulations, and new companies cannot form and old companies are going out of business. And you want to increase the regulations and make them even worse.
I’m going to cut regulations. I’m going to cut taxes big league, and you’re going to raise taxes big league, end of story.
Of note, Trump has publicly stated that he has never consumed alcohol, cigarettes or drugs. His doctor has said he has never used “tobacco products.” While his thoughts on regulations are clear, whether or not they would extend specifically to tobacco is unclear.
Vice president-elect Mike Pence is tobacco-friendly.
Pence voted against the Family Smoking Prevention and Tobacco Control Act, which gave FDA the authority to regulate cigars, e-cigarettes and other tobacco products. Over the years, Pence has received contributions from a variety of tobacco companies, like Phillip Morris and R.J. Reynolds, and the National Association of Convenience Stores (NACS).
It’s unclear whether Pence’s support for tobacco is solely at the big tobacco level, something that’s particularly important given Altria—parent of Phillip Morris—is against exempting premium cigars from FDA control. He did sign a law last year that allowed for new cigar bars in Indiana, the state in which he is currently the governor.
Rudy Giuliani, the former mayor of New York City and high profile Trump surrogate, is perhaps the most likely advocate for cigars in this new White House. Giuliani is a noted cigar smoker, even mentioning cigar companies on Fox News on Tuesday night, and is likely to have a cabinet position in the Trump administration, having been talked about as attorney general.
Whatever the case, it’s unlikely anything will happen prior to Jan. 1, meaning cigar companies will have to comply with some registration requirements from FDA.
Three things. One, until anyone gets a grasp of what a Trump administration looks like, it’s unlikely anyone can make any prediction about what Congress will do regarding much of anything, other than very little between now and Jan. 21.
Two, it’s even more unlikely that Congress will vote on any piece of legislation that largely affects cigars with the exception of an appropriations bill. The chances of the standalone exemption bills passing is almost non-existent, rather, those bills are used largely for education of members of Congress about the unique issues regarding cigars.
Finally, it seems likely there will be a big push to change the Republican leadership in the House of Representatives, particularly with Speaker Paul Ryan, R-Wis. It’s unclear who and how Congress will be led, something that could affect cigars directly and indirectly.
In addition, four states had ballot measures that would have raised taxes on tobacco products, including cigars.
California — Approves Massive Tobacco Tax Increase
Voters in California approved Proposition 56 which is likely to raise the tax on cigars from around 27.3 percent of the wholesale price to north of 65 percent of the wholesale price.
Colorado — Rejects 55% Increase of Tobacco Tax
Colorado voters rejected a proposal that would increase the tax on other tobacco products from 40 to 62 percent.
Missouri — Rejects Two Tobacco Tax Increase Proposals
Voters in Missouri rejected two tax increases on cigarettes, one of which also would have increased the tax on cigars.
North Dakota — Rejects Doubling of Tobacco Tax
North Dakota voters handily rejected a doubling of the tax on cigars and other tobacco products.