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Tariffs, Trade Wars, and Vaping

Tariffs. Maybe you're in the steel industry, and you've seen a lot of new hires come about because of them. Maybe you're in the automotive industry, and you've seen another round of layoffs come about as a result of them. Maybe you've just heard about them on the news, and never thought they'd really have anything to do with you. Well, as a vaper, they're about to.

Recently, the administration in Washington levied a new round of tariffs against China, ostensibly to make American goods more competitive, to punish Chinese intellectual property violations, and to lower the American trade deficit. Unfortunately, those tariffs include a 25 percent duty on e-cigarette kits and vaping batteries. Yeah, 25 percent. If that seems high, it's because it really is: current tariffs are around 2 to 6 percent: an increase of 25 percent is massive.

In some circumstances, the increase in tariffs - remember, this isn't just vape devices, it's steel, plastic, and aluminum, as well as finished goods like refrigerators, antennas, and motorcycles: 279 different products in total - will push production to domestic sources. In other words, instead of buying a Chinese-made antenna, you can buy a US-made antenna, which seems at least on the surface to be good for America.

Washington DC at night

However - setting aside questions of the benefits of free trade - we in the vaping industry can't do that, because of the regulatory sanctions imposed by the FDA. As the Vapor Technology Association notes, "any company outside of China wishing to enter this market would be unable to do so under the current FDA regulatory regime, which prohibits the entry of 'new products' to the U.S. market absent marketing authorization. This authorization requires a manufacturer to meet extensive premarket application requirements, which are as of yet undefined but no doubt would take at least two years to complete." And you don't have two years to wait for a new starter kit! With 91 percent of all vaping devices being produced in China, we simply have very limited choices for getting you hardware elsewhere.

Conventional wisdom is that we simply pass the increase in costs onto you, the consumer, in total. As Gregory Conley of the American Vaping Association testified to the US TRO, "a rapid rise in the tariffs assessed on vaping products will only result in a tax increase on American businesses and consumers." Our costs go up 25 percent, your price goes up 25 percent. But we're not interested in doing that to you.

Now, we can't just leave prices where they are - our margins wouldn't allow that - but we're willing to share the burden of increased costs with you. So rather than our prices on kits and batteries increasing 25 percent, we're increasing them just 10-13 percent, and splitting the difference with you. And we're only increasing prices on those specific products that are being impacted by the tariffs: just kits and internal batteries, not components and not coils and not vape juice! (We knew what you were most worried about!)

Washington DC

And we're not going to stop there. We're continuing to lead the fight in Washington, through our lobbying and support for trade organizations like AEMSA and SFATA. It's just that now the war has to be fought on two fronts: the FDA's regulations, and the burdensome tariffs imposed by the new administration. We're not going to take these continued attacks on our hobby - our way of life - lying down. We believe in vaping, in its benefits, in its joys, and we're not going to sit idly while Washington makes us collateral damage in a trade war, or unfairly targets us with burdensome regulations. We're going to fight, and we're going to keep fighting, and we hope you'll do the same.

Contact your Representative, and tell them what you think of these new tariffs. Reach out to your Senator, and let them know how you want them to vote on vaping regulations. Speak up to the administration in Washington, with your votes, on social media, however you can let your voice be heard. We are the faces of the vaping industry: we are vapers, we are vape shop employees, we are vaping, and we will not be silent!

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