Trump’s trade war hits vaping with tariffs

President Trump is now becoming a bit of a double edged sword for the vaping industry and community.

In case you missed it, the Obama administration had set a regulatory path to a de-facto ban on 99% of vapor products on August 8th 2018. Most of your favorite products would have ceased to exist just a few weeks ago. When the Trump administration swore in Dr. Scott Gottlieb as the new FDA chief, one of his first actions was to extend that date to 2022. Love him or hate him, our president is the reason that the vaping industry still exists right now.

But now the ongoing trade war with the US and China has pulled the vaping industry into the mix. Trump initially put tariffs on $34 Billion of Chinese imports. After the chinese government retaliated in kind, the administration promised to strike back by slapping tariffs on $450 Billion of imports. The second wave of tariffs which was implemented August 23rd 2018 includes a 25% tariff on chinese vaping devices. With over 90% of vaping hardware as well as all the required electronic components being manufactured in China, few if any American jobs stand to benefit from tariffs.

Margins on hardware are paper thin these days, and most retailers cannot afford to absorb any of the increased cost. You may not have noticed any price increases yet, but they are more than likely coming very soon. Most importers keep weeks if not months worth of inventory. Plus, many bulked up their purchasing right before the tariff took effect because nobody wants to be the first person to jack up their prices. Once that inventory starts getting replaced with post-tariff goods they will have little choice.

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