President Donald Trump started a trade war and the U.S. vaping industry finds itself getting bloodied on the front lines. Vaping tariffs could decimate the industry.
The industry’s flanks are not secured and as new threats emerge, in forms of health warnings on packaging, the vaping market should not feel well-protected by its leader and chief.
On the campaign trail and during the early months of his presidency, Trump and his (ever-shrinking) administration spoke of an uneven trade practice with China. Trump threatened, in addition to $50 billion in tariffs previously imposed, to levy another 25 percent on $200 billion of the country’s imported goods. That, of course, includes vaping products and supplies. The first wave of the new charges — a 25% tariff on all imported Chinese e-cigs, mods, batteries, and assorted paraphernalia — went into effect yesterday.
Considering two years ago the U.S. imported more than 90 percent of vaping products from China, domestic manufacturers are bracing to suffer additional financial casualties in the next wave of attacks.
The vaping tariffs likely will impact future pricing. Forecasters predict vaping products could rise approximately 15 percent. Nielson Tobacco report suggested 2018 U.S. sales could surpass the $5.5 billion plateau, Reuters reported.
According to a study by Tobacco Control, the journal indicated a 10-percent rise in vaping cost would curtail sales 12-19 percent. The reason for the sudden drop, the journal stated, was a high percentage of customers are “experimental” and higher costs could turn a lot of them away.
Among the industry’s foot soldiers, Matthew Milby, a local vape shop owner in Maryland, told Reuters he fears many of his brothers-in-arms could be forced to shutter their operations.
“Margins on products are already low,” said Milby, owner of two Smoke Free Nation retail shops. “To maintain margins we’d have two choices: raise prices or cut employees’ hours.”
With a U.S. workforce ill-equipped and under-manned to fill the ranks of developing and manufacturing vaping products domestically, SV3 President Geoff Habicht told Reuters higher prices will be the collateral damage to Trump’s aggressive approach. Instead of paying $40 for a typical vaping device, the price likely will rise to $45-50, Habicht said, adding $10 refills could climb to $12.50 – or higher.
The war is on.
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