U.S. Proposes 100% Tariffs on Nicaraguan Imports — Industry Prepares for Possible Impact

Puro Tobacco
Oct 21
3 min read

By the Editorial Board, Puro Tabaco Magazine | USA | October 22, 2025

Series: Trade & Policy Watch 2025

The Office of the United States Trade Representative (USTR) has floated tariffs of up to 100% on certain imports from Nicaragua and a possible suspension of CAFTA-DR preferences. Nicaragua’s premium-cigar ecosystem — anchored by Estelí, Jalapa, and Condega — and its network of smallholder farms would feel the first shockwaves. (Reuters coverage)

A Trade Relationship at Stake

Nicaragua exported about US $4.6 billion in goods to the United States in 2024 across textiles, coffee, beef, gold, and premium handmade cigars. Within tobacco, the production hubs of Estelí, Jalapa, and Condega are internationally respected for craftsmanship and reliable, regulated supply chains.

The country’s premium-cigar landscape features globally recognized manufacturers: Padrón Cigars, Oliva Cigar Co., Drew Estate, A.J. Fernández Cigars, and Perdomo Cigars — alongside Arturo Fuente, whose mega-factory La Bella y La Bestia in Estelí has drawn global attention (see also: Halfwheel coverage). Together, these houses form the backbone of Nicaragua’s premium-tobacco exports and employ thousands of artisans and technical staff.

Agriculture and Tobacco’s Broader Role

Nicaragua counts roughly 260,000 farm holdings — approximately 220,000 family farms and 40,000 family business farms. Many depend on export crops like coffee, tobacco, peanuts, and sugar that have benefited from stable U.S. market access under CAFTA-DR.

The tobacco sector alone sustains more than 80,000 direct jobs and over 200,000 indirect livelihoods across leaf cultivation, fermentation, rolling, packaging, printing, inputs, and logistics. A combination of a 100% tariff and suspended preferences would reverberate through these networks, touching not only factories but also farm families, cooperatives, suppliers, and transporters who rely on dependable export demand.

“These are highly specialized, labor-intensive operations that sustain rural employment. Stability in trade translates directly into stability for families.”

Industry Voices and Diversification

Producers in Estelí are responding with caution and professionalism, emphasizing continuity for workers and long-standing partnerships while evaluating logistics and market-mix adjustments.

“At Oso de Nicaragua Tobacco Company, S.A. (ONTCSA), we believe that if these tariffs are implemented, we’ll likely see a redirected flow of trade toward alternative markets such as Asia, China, and Germany — regions that have shown increasing interest in premium Nicaraguan tobacco,” said Stephen Ramsey Wray Toledo, President of ONTCSA. “While the U.S. remains an essential partner, diversification is both a natural and necessary evolution for our industry.”

Analysts note that strategic diversification toward Europe and Asia could soften potential shocks while collaboration with U.S. partners remains crucial for regulatory alignment and consumer availability.

A Cultural and Social Legacy

Nicaragua’s cigar craftsmanship is a cultural tradition as much as it is commerce. Factories in Estelí, Jalapa, and Condega employ skilled artisans whose techniques have been refined over generations. The sector’s reputation for quality rests on traceable, regulated processes — including U.S. import compliance overseen by the U.S. Food & Drug Administration (FDA).

What Comes Next (Reader Service)

The USTR has opened a formal public-comment period until November 19, 2025. Stakeholders across the supply chain — farmers, exporters, importers, distributors, and retailers — can provide input on:

Proposed suspension of CAFTA-DR benefits for Nicaragua
Potential 100% tariff on imports
Timing, scope, and sector-specific effects

Submit comments here: USTR-2025-0006 → https://comments.ustr.gov/s/submit-new-comment?docketNumber=USTR-2025-0006

Regardless of the outcome, Nicaragua’s position in the premium-cigar world — anchored by brands like Padrón, Oliva, Drew Estate, A.J. Fernández, Perdomo, and Arturo Fuente — remains fundamental, powered by farmers and artisans whose expertise defines the country’s reputation.

About Puro Tabaco Magazine: Puro Tabaco Magazine is a Nicaragua-based trade publication covering premium tobacco, agriculture, and global commerce. Our reporting focuses on data, supply chains, and craftsmanship.

Media Contact: press@purotabacomagazine.com

Editorial Note: This feature is strictly industry and trade analysis. It does not represent political positions.

Quick Reference Links:

USTR — https://ustr.gov/ • CAFTA-DR — https://ustr.gov/trade-agreements/free-trade-agreements/cafta-dr-dominican-republic-central-america-fta • Public Comment — https://comments.ustr.gov/s/submit-new-comment?docketNumber=USTR-2025-0006 • Reuters report — https://www.reuters.com/world/americas/us-proposes-trade-measures-against-nicaragua-over-labor-rights-2025-10-20/ • FDA Tobacco — https://www.fda.gov/tobacco-products