Chinese Tariffs: Round Two Begins Next Week

Chinese Tariffs: Round Two Begins Next Week

The Trump administration has followed through on its threat to impose additional tariffs on Chinese products this week, and that includes a second round of taxes on vapor products. The new tariffs will go into effect on Sept. 24. More than $200 billion in Chinese imports will be subject to the new tariffs.

The first round of Trump’s vapor tariffs began about a month ago, and included only finished products like kits. The tax rate on those products was 25 percent, and those tariffs will still remain in effect until the administration decides to end them.

The new tariffs apply to individual products, including mods and atomizers. This group of products will be subject to a 10 percent tariff rate now, but Trump administration trade officials say that will increase to 25 percent early next year if China and the U.S. don’t come to an agreement on trade terms.

Tariffs are taxes added to products imported from another country. While tariffs are intended to create an economic benefit for competing American-made products, in an industry like vaping that gets almost all of its products from China, there is no domestic manufacturing industry to help.

There is no large-scale production of e-cigarettes or other vapor products in the United States — except for bottled e-liquid. That means the tax will wind up creating only harm to an industry like vaping. It will punish domestic importers, wholesalers, and retailers that have no American-made products to offer as alternatives to the Chinese ones. Most of all, the tariffs will punish vaping consumers.

Vaping industry representatives and free-market advocates have opposed the tariffs, testifying at U.S. Trade Representative hearings, and urging the administration to exempt vapor products from the punishing taxes. American Vaping Association president Gregory Conley advises business owners to contact their elected officials in the U.S. House and Senate and urge them to work toward a solution to the impasse.

Between the tariffs and FDA Commissioner Scott Gottlieb’s demand that the vaping industry show how it will prevent youth sales and use within 60 days, the administration has surprised and disappointed many who expected less interference from the supposedly pro-business President Trump.