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US-China Trade War Hits the Vaping Industry, Again

US-China Trade War Hits the Vaping Industry, Again

At the beginning of March, the United States and China escalated an emerging trade war that threatens to cripple the vaping industry once again.


Back in September, we reported on escalating trade tensions between the two countries, which resulted in the announcement of new tariffs, or taxes on product importation, from both sides. Those tariffs, however, which would have raised the tax on imports from 10 percent to 25 percent, were temporarily suspended starting January 1.


Vaping, at least as we know it today, first came to be in Beijing, China in 2003, though it didn’t make an appearance stateside until around 2007. Because it's the technological birthplace of the industry, many of vapor’s largest brands are still based in China. The country is one of the most trusted producers of big name vape hardware in the world, and many distributors in the United States rely on vapor products, particularly hardware, that's made in China.

China tariffs are taking an effect on the vaping industry

Some examples of popular Chinese vape hardware brands include Smok, Vaporesso, KangerTech, Aspire, Sigelei, Joyetech, and Innokin. Think about how commonplace the brand Smok has become in the popular American vaping market, just to name one of the most prominent examples. These brands are all affected by the imposed tariffs and it has a ripple effect through an industry and the consumer.


The trade war, which first kicked off back in March of 2018, has slowly been escalating between the two countries after an initial hike in tariffs aimed primarily at Chinese steel and aluminum exports, which the Trump administration views as harmful to domestic metals production. China responded by slapping tariffs on over 128 American products, including pork, fruit, and soybeans, the latter a major staple of the US export market..

United States Tariffs on Chinese Imports Have an Effect at Home

 

This tit-for-tat approach escalated in September, when the Trump administration authorized a 25 percent tariff (up from 10 percent) on $200 billion worth of Chinese imports into this country. This affected many electronic items including vaping devices, and the increased tariffs remained in place for a brief period.


On December 1, the two erstwhile allies effectively called a truce, dropping the tariff rate from 25 percent to 10 percent on these goods. The announcement came after China agreed to purchase a "very substantial" amount of U.S. products, including agricultural, industrial and energy products, and to drop their own tariffs starting January 1. For about five months, this truce remained.


On May 10, following through on an earlier threat, the White House re-implemented the 25 percent tariff rate, citing a lack of progress in talks related to a broader trade strategy. The result was a severe drop in the stock market , as well as increased anxiety from the vaping community.  


The increased tariff rate does not apply to products that shipped before May 10, as long as they enter the United States by June 1. That means if a supplier has a shipment of Smok products currently in transit, they would only be subject to a 10 percent tariff charge rather than 25 percent, so long as they arrive before the deadline.


For consumers, the most important thing to know is that the availability of some of your favorite brands of products, liquids, and hardware might be limited. This includes many popular products, such as Smok's Big Baby Beast Tank.


It’s unclear how long this latest trade war escalation will plague vapers. It could only remain in place for a couple months like the last tariff hike, or we could be in it for the long haul. As of the writing of this article, the talks between the US and China have effectively stalled with no clear resolution in sight.


It's hard to pick a side in the US-China trade war. Proponents who argue against rampant theft of intellectual property and a refusal by the Chinese to allow unfettered American access to domestic Chinese markets have a point. But reality suggests Americans aren't willing to pay the price for domestically-produced goods that match the Chinese on quality while providing a living wage to the American workers who would produce them.


In the end, the only real losers in a trade war are businessmen and women who lose access to affordable products and consumers, who ultimately end up paying for White House-imposed taxes through higher retail costs. Whether this will lead to a meaningful change in global political behavior is yet to be seen, but for the sake of loving our access to affordable vaping, rest assured we'll continue watching.

acuity