WHAT’S HAPPENING AND WHEN?
Trump has proposed tariffs on U.S. imports from China, this new tariff applies to ALL GOODS coming from China, including electronic cigarettes, known as vaping products.
The proposed Tariff would impose 25% duty on all Vape items coming from China. This means that the average starter kit you currently see online for $60 to $70 could now become $75 to $90, a possible $15 to $20 increase on your next purchase of a starter kit.
WHATS THE LONG TERM EFFECT THAT THIS WILL HAVE ON THE VAPE INDUSTRY?
Industry Analysts estimate that a 10 percent price increase in e-cigarettes would reduce sales by between 12 percent to 19 percent. The study noted that because many people who switch over to vaping are mainly experimenting on whether it would be feasible for them to leave their current cigarette habits, higher prices on starter kits would make this switch much more difficult.
“Margins on products are already low, to maintain margins we’d have two choices, raise prices or cutting employees’ hours,” said Matthew Milby, who owns two Maryland vape shops under the name Smoke Free Nation. He predicted some shops would be put out of business. The reason for this is that brick and mortar shops have to sell their products at high prices in order to cover all the overhead costs that come with running a brick and mortar shop, if the prices increase even more then it will become harder for shops to move expensive products for a reasonable margin.
Two of the biggest companies, Juul Labs and VMR Products, are among companies with products that will be hurt by the tariffs. Juul led the market growth last quarter, and held 68 percent of the market share according to a June Nielsen Tobacco report.
WHO GETS HURT BY THIS THE MOST?
Trump believes this policy will help sway Americans to buy USA made products and keep the money flow within the country instead of going to China.
In this global economy, Trump cannot expect the USA to be self-reliant economy, it’s just not possible in this day and age to be of a isolation mentality, the world is highly interlinked, cutting ties with China is a huge mistake that will only hurt the common consumer in the end since all the costs are passed down to the average retail customer.
Jan Verleur, chief executive of vape maker VMR, is worried tariffs, which he will likely have to pass on to consumers with a 10 percent to 15 percent price increase, will reduce consumers access to the products since an estimated 70 percent of the company’s products would face the extra levy.
POSSIBLE TO MAKE VAPING DEVICES IN USA?
Ramping up U.S. manufacturing of e-cigarettes, which were invented in China, would be difficult until there is a clearer picture of the developing regulatory environment, including new labeling requirements and increased Food and Drug Administration regulation in 2022.
The United States also has too few workers with the specific technical expertise to make vaping products.
Trump cannot expect to push The United States back into the industrial age where the main job of many Americans was to go work in a factory.
Times and economic change have shifted the work ethic and mentality of Americans, Americans are no longer a people that will be seen to the world as factory workers or laborers. Americans need to maintain their status as innovators and leaders of the world, bringing out new technologies, ideas, and services to solve problems that will make life easier
All these tariffs are doing is just hurting the end consumer, which is the Average American who is trying to escape the crutches of big tobacco.
What do you think about these Tariffs? Do they hurt or benefit the vape industry? Please leave your comment in the comment section below
Thanks and keep on vaping!