By Timothy S. Donahue

Top Takeaways:

• Historic shift: Honduras surpassed the Dominican Republic in premium cigar exports to the U.S. for the first time on record.
• Nicaragua dominates: Nicaragua still accounts for more than 62% of the U.S. premium cigar import market.
• Sanctions impact: Industry sources say operational disruptions at Tabacalera de Garcia significantly affected Dominican export volumes.

For the first time in modern records of the premium cigar industry, Honduras has overtaken the Dominican Republic in cigar exports to the United States.

New first-quarter 2026 data from the Cigar Association of America (CAA) show that Honduras shipped 17.2 million premium handmade cigars to the U.S. between January and March, edging out the Dominican Republic’s 15.6 million cigars.

The shift marks a historic milestone in the premium cigar market, where the Dominican Republic has long held the No. 2 position behind Nicaragua. Overall, the U.S. imported 90.9 million premium cigars in the first quarter, a 3% decline from the same period in 2025.

Nicaragua remained firmly dominant, exporting 56.8 million cigars and representing roughly 62.5% of the U.S. premium cigar market.

While Honduras has shown steady long-term growth, industry observers say the Dominican Republic’s decline was exacerbated by operational disruptions stemming from U.S. sanctions targeting Chinese and Cambodian businessman Chen Zhi.

According to multiple cigar industry reports, sanctions imposed by U.S. authorities disrupted exports from Tabacalera de Garcia, the world’s largest cigar factory in La Romana, Dominican Republic. The factory produces major U.S.-market brands, including non-Cuban versions of Montecristo, Romeo y Julieta and H. Upmann, through relationships with Tabacalera USA.

At full capacity, Tabacalera de Garcia has reported annual production of roughly 40 million cigars, with approximately 23 to 24 million historically shipped to the U.S. market. Following the sanctions, the factory reportedly operated at only 40% to 45% capacity and laid off about 600 cigar rollers as U.S.-bound production slowed sharply.

“Because of the operational blockage in the United States, Tabacalera has been forced to temporarily adapt activity levels and employment related to exports to Tabacalera USA,” a company spokesperson previously said.

Industry sources say Tabacalera USA shifted portions of its production to alternative manufacturers, including factories operated by AJ Fernandez and Plasencia Cigars.

The disruption may be temporary. Earlier this month, reports surfaced that Spain-based Tabacalera SLU obtained provisional licenses from the U.S. Office of Foreign Assets Control, allowing exports from Tabacalera de Garcia and its affiliated Flor de Copán factory in Honduras to resume.

“Together, these two licenses establish a more stable path toward a return to normalcy,” company sources told Cigars-connect.

That could enable the Dominican Republic to reclaim its traditional No. 2 ranking later this year. However, Honduras’ rise has been building for years. CAA data shows Honduras increased its premium cigar exports to the U.S. by about 11% in 2025, while Dominican exports declined.

The U.S. imported nearly 430 million premium handmade cigars in 2025, marking the fifth consecutive year imports have exceeded 400 million cigars.