FYI – DTT implemented a Tariff increase on June 4th.

It was done on a SKU-by-SKU basis at the actual cost adder of the 10% tariff on the import of handmade cigars from Nicaragua.

The tariff is based on the FOB prices reflected on the import invoices – because DTT pays for much of its own tobacco, packaging, etc. the true cost of the tariff is not 10% to DTT, so we did not raise our wholesale prices by this amount – our increase is the actual added cost to DTT with no additional margin.

The overall increase across the portfolio is 3.82%, but some cigars it is more and others it is less.

About 60 days from now, the 10% tariff’s 90-day probation window will end, and unless something changes between now and then, the tariff will increase to 19%.

If this happens, we will implement another tariff increase accordingly.

If the tariff goes away, it will be quite a sticky wicket as DTT and our Purveyors will have inventory we both paid for at the tariffed amount.

So I am uncertain how we will roll it back, my current thinking is we may just let it ride and reduce the annual inflation cost increase in the 2026 price schedule.

But if and when this situation (which is what I am hoping for) arises, I will make the decision at that time.

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This is where everyone and their brother gets to post their opinion on the tariffs and argue about whether DTT should eat the cost.

#1 – I am not going to engage in an online debate about the tariffs. My opinion does not matter; what matters is that we have been and will continue to pay it; otherwise, we will not be allowed to import cigars.

#2 – DTT is a business; we can not afford to eat 3.82% in additional costs. I hate that the prices are going up; it does not make us richer, nor is it good that our customers have to pay slightly more. Thankfully, we operate the business debt-free and have the cash needed to float the extra 4% ourselves – most businesses do not have this luxury. We have been transparent and have minimized the increase to as small an amount as possible.

#3 – If this increase makes our products too costly for you to enjoy, I understand.

Best Regards,

STS

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About the Nicaraguan Tariffs:
The pending expiration of the 90-day pause on Section 301 tariffs for Nicaraguan goods is part of a broader U.S. trade policy shift. If reinstated at 19%, these tariffs will significantly impact companies manufacturing premium cigars in Nicaragua, like Dunbarton Tobacco & Trust. As the industry closely watches Washington, cigar retailers and consumers should be prepared for potential price adjustments industry-wide should the tariff rates be reimposed on July 8.