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US TAX ON CHINESE IMPORTS WILL HAVE A “ SIGNIFICANT DETRIMENTAL IMPACT ON THE VAPOUR PRODUCT INDUSTRY .”
Fears that prices on vape products could rise by 15 percent , stores may go out of business and fewer smokers will make the switch
By Gordon Stribling
The escalating trade war between the US and China is set to have a devastating impact on the US vaping industry with higher prices , job losses and store closures predicted . All imports of vaping products from China , including mods , batteries and other hardware are now subject to a 25 percent import tax as part of the US president ’ s ‘ America First ’ policy . Euromonitor International ’ s Head of Tobacco Research , Shane MacGuill , said the tariff would have a “ significant detrimental impact on the vapour product industry .” While many large companies may try to absorb the increased costs , the new tariffs will inevitably lead to higher prices and could lead to smaller businesses laying off staff or shutting stores . Ohio-based James Jarvis has already made the decision to close one of his six Vapor Station stores because of the new tax and fears more businesses will also be forced to close . James , who is also president of the Ohio Vapor Trade Association , told Vaping 360 : “ Some companies will start to close stores — especially in more financially challenged areas , because this increase will put the cost to the consumer out of their price range and potentially push them back to combustible cigarettes . This tariff has forced me to make the decision to close one of my locations as I will not be able to absorb the cost in that location since that town is very economically sensitive .” Critics of the new tax say that including vaping products does not make any sense because relatively few products in the industry are made in the US and the vast majority of vaping hardware is imported from China . In 2016 , China accounted for 91 percent 118 | VM19 of the $ 342.3 million of vaping products imported into the US , so the tariff will hit American importers , wholesalers and retailers particularly hard . American Vaping Association president Gregory Conley said : “ For the vast majority of American vapers , the choice is not going to be an American-made product versus a Chinese-made product with a 25 percent tariff . It ’ s only going to be the latter , which isn ’ t much of a choice at all .” According to industry estimates , the tariffs could increase e-cigarette prices in the US by around 15 percent and lead to a 20 percent drop in sales . Smoking Vapor president Geoff Habicht also warns of price hikes . He said : “ On products where the margins are lower … the retail increase will be close to 15-20 percent . On products with better manufacturing margin , the 25 percent tariff may only have an 8-10 percent increase at retail .” Matthew Milby , who owns Maryland-based Smoke Free Nation , predicts that the tariffs will inevitably lead to the closures of vape stores as profits are hit . He told Reuters news agency : “ Margins on products are already low , to maintain margins we ’ d have two choices , raise prices or cutting employees ’ hours .” High street vape shops provide an invaluable community service . For many people , they are the gateway to switching from smoking to a healthier alternative and eventually quitting altogether . It ’ s little wonder that the best vape shops inspire customer loyalty . While overheads mean physical vape shops are often more expensive than online alternatives , customers are willing to pay a little more