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Vaping Hit By US-China Trade War

Vaping Hit By US-China Trade War

VAPING is to be hit by a new US government tariff, which has put a 25 per cent tax hike on imports from China.

The first round of duty, applied to all shipments of e-cigarettes and vape goods, is part of an on-going trade war between the Trump administration and China, which started in July.

At present over 90 per cent of the world’s e-cigarettes are made in China and with much of America’s vaping products imported, 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 their products.

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 in the first week of July, Beijing then retaliated by doing the same.

Trump then threatened to increase the scope to $450 billion if China started taxing in retaliation and with a trade war now in place, the second wave of products to get hit by a 25 per cent tax hike – which was implemented last week - includes e-cigarettes and vaping products (finished products, not parts), amongst other electronic devices.

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

Chamber President Tom Donohue was reported by news organisation Reuters as saying 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.”

Speaking about the duty on vaping, experts have predicted while prices are unlikely to rise immediately, business owners would feel the hit as soon as their existing stock had been sold off.

Tariffs could push the price up of vaping products by up to 15 per cent and with a recent study in the journal Tobacco Control estimating a 10 per cent increase in e-cigarettes would reduce sales by between 12 to 19 per cent, insiders are worried the prices could see badly affect the industry. The study also reported that because many vapers are experimenting, rising prices could put them off making the switch from cigarettes.

Matthew Milby, who owns two Maryland vape shops under the name Smoke Free Nation, predicted some shops would be put out of business, telling Reuters: “Margins on products are already low, to maintain margins we’d have two choices, raise prices or cutting employees’ hours.”