What Does a Trump Win Mean for Cuban Cigars in the U.S.?

As mentioned on Wednesday, more remains uncertain than certain about what the new president of the United States will do.

Cuba and Cuban cigars remains an extreme fascination for many and at no point since the Cuban embargo was enacted has there been a period of time where more has changed when it comes to the possibility of Cuban cigars coming to the U.S.; some for the better and others likely delaying the time before you see Cuban cigars on shelves at retailers in the U.S.

Many have asked what will happen to the changes made by President Obama under a Trump administration; so here are some things to consider.

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A week ago, President-elect Trump said the following:

We will cancel Obama’s one-sided Cuban deal, made by executive order, if we do not get the deal that we want and the deal that people living in Cuba and here deserve, including protecting religious and political freedom…

It should be noted an Obama administration official was quoted in The Miami Herald saying that it might take time to reverse some of the changes made by President Obama, though it seems very clear: if Trump wants to roll back all of the changes made by Obama, he can.

That would mean: more restrictive access to and from Cuba, a return of restrictions on American businesses operating in Cuba, and of course, a return to a ban on bringing back Cuban cigars for personal use.

Currently, travelers can bring back Cuban goods when returning from any country so long as they remain within the general requirements for personal goods and pay any required taxes. This effectively amounts to 100 cigars, or $800 in goods, every 31 days per traveler.

Buying Cuban cigars and having them shipped to the U.S. remains illegal, as does selling Cuban cigars in any commercial capacity within the U.S.

BANNING CUBAN CIGARS, AGAIN

Rolling back those allowances wouldn’t be hard, but it is challenging to envision a world in which enforcement ramps back up. Even before the most recent change or even the one before that, which made it legal for those traveling back from Cuba to bring $100 worth of cigars or rum back into the U.S.—the rules weren’t really being enforced.

The U.S. is believed to be one of, if not the largest market for Cuban cigars. That’s not because of black market smugglers driving boats full of Cohibas from Havana to Key West—it’s because U.S. Customs and Border Patrol has decided there are rightfully more important things to worry about than Cuban cigars.

I’m not sure if there’s really any positive political implications for banning Cuban cigars again. There’s probably support amongst Miami’s Cuban-American population, but it may not even be the majority of that population.

Whatever happens, it’s hard to imagine a change to how strictly the ban on Cuban cigars will be enforced barring some major national security-involved event involving Cuban, and no, this doesn’t count.

FDA

No matter who won the presidential election, Cuban cigars have two big barriers to ending up on retail shelves: one here and one on the island.

The U.S. Food & Drug Administration’s (FDA) deeming regulations make it illegal for Cuban cigars to be sold on U.S. shelves, or even imported, until they get approved, just as they do for cigars produced in any other country.

Grandfather provisions in the Family Smoking Prevention & Tobacco Control Act specifically say that products must be sold “in the United States” prior to Feb. 15, 2007.

Cuban cigars would face arguably the largest uphill battle to getting substantial equivalence, the pathway to approval by FDA, because there is no existing product sold in the U.S. In short, while cigars from Nicaragua could compare themselves to other cigars from Nicaragua or even the same factory that are similar in tobacco composition and manufacturing technique; Cuba will have nothing to compare themselves to, other than non-Cuban cigars.

There has been unsubstantiated rumor that there could be some special provision added to allow for Cuban cigars to bypass FDA. I should reiterate, there’s zero evidence that the government is considering or has considered this. Secondly, if that were to be true, it would probably be more beneficial to non-Cuban manufacturers who would sue based on equal protection grounds.

SUPPLY

As has been mentioned before, Cuba has massive production issues, something that has shown no signs of getting better.

Even without FDA regulation or the trademark issues that exist for half of the active Cuban cigar brands—Cuba almost certainly doesn’t have enough cigars to supply a truly open U.S. market, and certainly not at the expense of their distributors and retailers around the world.

Because of how cigars are made, one good crop won’t be enough to wipe out three or four bad ones. Cuba needs to have several consistently good crops so it can not only increase production, but also build reserves in the event of hysteria when the U.S. market becomes truly open.

THE BIG PICTURE

Regardless of what Trump does, the idea that Americans around the country will be able to walk into domestic retail stores and regularly have access to Cuban Montecristo No.2s is a pipe dream.

A new administration aside, there are three major barriers to getting cigars onto U.S. shelves and there’s nothing President-elect Trump can do about heavy rains in Pínar del Río.

As was stated on Wednesday, there are bigger issues than cigars. You come here for cigars and we intend on providing you that coverage, but as with everything in Cuba—it’s important to remember that there’s a lot more than just Havana Club and PSD4s.

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