How the US Trade Embargo Impacted Cuban Cigars

Since 1962, an embargo has been in place for trade between Cuba and the United States. With Cuban cigars being such a key export for the country, cigar lovers in the US have been unable to legally get their hands on a Cuban smoke, unless they leave the country.

We take a look at the history of the embargo, how it has impacted the Cuban cigar industry and the future of Cuba’s relationship with the United States.

Why Was the Embargo Put in Place?

When Fidel Castro rose to power, he began to nationalise much of the countries industry – including the cigar industry. Before the 1960s, much of Cuba’s economy and resources were under US control. By nationalising Cuba’s industry, this power was taken away from the US without any benefit.

In addition to this, Castro’s ties to the Soviet Union and communism put America at unease, and so a trade embargo was put in place with the aim to collapse Cuba’s government.

You can discover more about the history of Cuban cigars in our Cigar Country Spotlight blog!

Impact of the Embargo on Cuban Cigar Availability in the US

Despite occurring sixty years ago, the embargo is largely still in place today. While some restrictions were eased by President Obama in 2015, American cigar smokers are still only able to travel to Cuba to enjoy their Cuban smoke, and may only bring back 100 cigars duty-free, up to the maximum value of $800.

Trading Cuban Cigars

While an embargo is in place between the US and Cuba, Cuban cigars have long been widely available in the rest of the world, particularly Europe. In fact, the British company, Imperial Tobacco, hold the rights to distribute Cuban cigars around the world.

This means that even if the trade embargo between America and Cuba is dropped, America may not regain control of the distribution of the cigars.

How Has the Embargo Affected Cuban Cigars?

Despite the trade embargo, Cuban cigars remain one of the most popular cigars around the world. Brands that operate under Cubatabaco and Habanos SA are typically revered as being the best around and are often seen as luxury goods.

A positive effect?

While Cuban cigars are undoubtedly excellent smokes, it could be said that there is an element of the ‘forbidden fruit’ about these brands though, which adds to their appeal.

The fact that Americans are unable to legally buy these smokes may make them more desirable, and there have been many attempts made to smuggle them into the States. So, in some ways, it can be argued that the embargo has only added to the allure of these cigars, and thus boosted sales.

A negative effect?

However, there is also the negative side of the embargo, which allowed for competitors to rise up in rival countries.

For example, following the revolution and nationalisation of Cuban cigar factories, many cigar producers fled to the likes of the Dominican Republic to set up production again.

With the embargo banning the import of Cuban cigars, cigar lovers in America then turned to the likes of the Dominican Republic for their cigar needs, taking the business away from Cuba.

Will the Trade Embargo Be Lifted in the Future?

When the Cuban revolution took place, with Cuba taking back control of many “American-owned” assets, it is estimated that the monetary worth of these assets is in the range of $6 billion.

Cuba is required, by law, to repay this sum before the trade embargo can be lifted; however, it is very unlikely that this would take place, as it could make the US seem weak.

However, some argue that the embargo is outdated and unnecessary, and could actually be causing more harm than good to the US economy. This is because the embargo goes both ways, with Cuba unable to access many American goods. It is, therefore, estimated that the embargo costs the US economy between $1.2 and $4.8 billion each year in lost trade. 

Luckily, here in the UK, Cuban cigars are readily available in our stores and online. Check out the range we have here at Havana House to get inspired!