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Vaping Faces Big Tax Hit In Trump Trade War

Vaping Faces Big Tax Hit In Trump Trade War

VAPING is set to be hit hard by a new US government tariff which would see a 25 per cent tax hike on imports from China.

The potential impact would not just affect consumers buying over the internet but vape shops across US towns and cities who are already struggling to cope with high taxes on e-cigarettes and vape goods.

The new tariff is to come into affect imminently if a trade war, which started on Friday (July 6th), between America and China continues.

Earlier this year, President Trump warned he would implement tariffs on $34 billion of Chinese imports, saying his administration believed Beijing had unfairly acquired US intellectual property for decades and needed to pay the price. After slapping a 25 per cent tax on over 800 exported goods at the end of last week, Beijng has now retaliated by doing the same.

Trump threatened to increase the scope to $450 billion if China started taxing in retaliation and with a trade war now in place, a second wave of products lined up to get a 25 per cent tax hike includes e-cigarettes and vaping products, amongst other electronic devices.

The US Chamber of Commerce has spoken out against the tariffs, saying a global trade war will ultimately hurt American consumers.

Chamber President Tom Donohue said to news organisation Reuters about the decision: “The administration is threatening to undermine the economic progress it worked so hard to achieve. We should seek free and fair trade, but this is just not the way to do it.”

If the duty is implemented, experts say it is difficult to tell when the affects would start to be felt by vapers - but business owners would feel the hit as soon as their existing stock had been sold off.
Insiders also warn, vape store owners could now be forced to close, after already suffering the consequences of high taxes. In the past two years states across America have already imposed their own tariffs, with many implementing a 40 per cent tax on sales of e-cigarettes and associated products.

It means retailers have to pay 40 per cent on inventories when purchasing from wholesalers, so an individual with a $100,000 inventory has to find an extra $40,000 to stay in business.

In Pennsylvania, where a 40 per cent tax was brought in in 2016, a quater of its 400 vape shops closed in the year after and with the new tariff set for imports, vape shop owners worry more will struggle to stay open.

Vape shop owner Myk Londino said of the vaping tax: “If there’s one thing that I absolutely love about the vaping industry, it took a lot of the younger-adult generation and turned us into business owners and advocates for something that we believe in.

“[The tax] is extremely discouraging and disheartening. People I personally know locked their door and never unlocked it again.”