How will the US trade tariffs affect the vaping industry?

The financial implications of the possibility of a trade war between China and the US are already being seen. The US is proposing to impose 25% tariffs on over $200 billion worth of Chinese products across a selection of industries. This is on top of the $50 billion already imposed on certain imports. But, with one of the industries affected being e-cigarettes, how will this affect the country’s 9 million vapers?

The vaping industry in the US is already facing some setbacks. With the start of health warnings being added to packaging, the industry is already facing the prospect of slowing levels of growth. Now, with the new levies on imported Chinese products, which make up a large proportion of the market, there could be even less growth. Especially when you consider that one of the biggest appeals of vaping to smokers is that it’s significantly cheaper than smoking tobacco products.

According to a recent study published in the journal Tobacco Control, it’s predicted that for every 10% price increase in e-cigarettes, sales will fall by anything from 12% to 19%. Experts in the industry predict that the new tariffs could drive up the cost of vaping by around 15%. Additionally, many e-cigarette customers are new to vaping, or experimenting with the products. Therefore, rising prices could have a large impact in the future.

One shop owner, Matthew Milby, who owns two vape shops under the brand Smoke Free Nation predicted that the increase in tariffs could put some shops out of business. He said in an interview: “Margins on products are already low, to maintain margins we’d have two choices, raise prices or cutting employees’ hours.”

Industry experts agree that the industries smallest firms would be hit hardest by the price hike. But, larger companies have also warned that their products will be hurt by the new tariffs. Two of the biggest companies, Juul Labs and VMR products, are among those concerned about the future of the industry.