Tobacco Tariffs

[seldom]

Effective today the EU is responding to President Trump's steel tariffs by re-instituting tariffs on U.S. tobacco among other things. I wonder how large an impact this could have on pipe tobacco produced in the United States. How much do American pipe tobacco producers export to Europe? My impression is that U.S. pipe tobacco is mostly kept in country. Is this an inaccurate impression? Will pipe tobacco producers in the states take a big hit? Anyone on the forum with insight into this?
Suppose as long as I am in the E.U. I'll have to make do with Dan Pipe, HU, Orlik, MacBaren, Peterson, Rattray's and other European producers.

 

[mikethompson]

I always thought the bulk of tobacco produced in the US goes to China. The relatively small amount that is used for pipe tobacco is probably sold domestically, although that's only a guess.
Cosmic might have more insight.

 

[3rdguy]

A trading buddy can help mitigate the issue.

 

[hoosierpipeguy]

Suppose as long as I am in the E.U. I'll have to make do with Dan Pipe, HU, Orlik, MacBaren, Peterson, Rattray's and other European producers.

What else would you need? Don't forget SG.

 

[seldom]

hoosierpipeguy: That is my point exactly. With so many excellent tobacco options here why would Europeans buy American if it costs drastically more?
Then again does Dan Pipe, HU, Orlik, et al import American tobacco to produce their blends? In that case the tariff could have a big impact on pipe tobacco prices here. I hadn't considered this possibility.

 

[woodsroad]

Is the tariff on processed or unprocessed tobacco?

 

[mso489]

For insight on tariffs read up a little, or a lot, on Smoot-Halley, legislation that imposed tariffs that are considered by many economists and historians to have been part of what brought on the Great Depression. Tariffs in trade are full of unintended consequences. I think it's true that China imports the most U.S. tobacco, but some of it does go to blenders in E.U. Pipe tobacco is a pretty small market so not likely to be decisive in terms of a trade balance with Europe or anyone.

 

[mikethompson]

Pipe tobacco is a pretty small market so not likely to be decisive in terms of a trade balance with Europe or anyone.

Exactly MSO, we few, we happy few.

 

[bnichols23]

>>"have to make do with ... European producers." -- I can surely think of worse situations to be in. JMOVHO, but Trump could stand to get some economic advisors who know WTH they're doing & *don't* have their own agendas.... Don't worry, I'm not going into a politics rant.

 

[bnichols23]

>> mso: "pretty small market so not likely to be decisive in terms of a trade balance with Europe or anyone" miket:

>>"Exactly MSO, we few, we happy few."
Thanks, guys -- y'all know how to make me feel better. Serious.

 

[seldom]

I agree that a tobacco tariff isn't going to be the end of the world. But it has the potential to hit my wallet pretty hard! I'm also afraid that it may be the proverbial straw that breaks the back of blenders who are wondering if the pipe tobacco market is even worth it any more.

 

[bnichols23]

Follow you complete, seldom. Small market, true, but there are *people* in that small market, *&* it wouldn't take much to squish. it.

 

[pepesdad1]

And that my friends are why you cellar!

 

[jfred]

It looks like the tariffs on tobacco applies to packings greater than 500 gr. At least it will still be possible to order a precious tin of Haddo's and only pay double 8O

 

[olkofri]

Wonder how it works. Who charges the tariffs: the Canadian/European customs agency or the seller in the US? If the former, wouldn't we pay tariffs only if we get dinged?

 

[woodsroad]

Tariffs are charged by the importing country’s government, and paid by the importer.

 

[warren]

I heard from a guy, who knows a guy, who has a friend in the tobacco business, that importers of tariffed products will select one retailer in their country and charge off the entire tariff to him on his next purchase of a tin. He then will select one customer and pass the entire cost on the first tin sold. Try to be the second customer.

 

[PaulTheScandinavian]

Well, I think in the distant future with constantly increasing prices here in Scandinavia one day it may became true that the pipetobacco producers will introduce 25gr pouches to general public,cuz very soon no would afford buying a pouch of standard Mc Baren or Amphora with retailing price more than $ 20.

 

[jfred]

In Denmark today import taxes are around 6$ for a tin bought outside the EU. If I buy a handful of tins from a US retailer, the price pr. tin (shipping included) will easily be 18-20$ = double the US retail price.
The good news: In Denmark a 50 gr. tin sells for 18-20$ (pouches are 14-16$), so I can actually try interesting US tobacco for around the same "attractive" price as all the locally available stuff... :D New tariffs hopefully won't change that.
If anybody is interested, here's a link to a list of the proposed EU tariffs (tobacco on page 2): http://trade.ec.europa.eu/doclib/docs/2018/march/tradoc_156648.pdf

 

[jvnshr]

With so many excellent tobacco options here why would Europeans buy American if it costs drastically more?

Curiosity, enthusiasm...