The Trump Administration Wants To Slap A 25% Tax On Vape Imports coming from China

Vapes might go up in smoke.

Posted on July 26, 2018, at 5:41 p.m. ET

Vape makers within the US, whose industry can be on its way to being worth $5.5 billion, are worried the Trump administration’s proposed Chinese import tariffs will crush their business. of which’s because an estimated 91% of vaping devices within the US are imported coming from China.

On Tuesday, vape companies along with trade associations argued against the tariffs during a public hearing at the Office of the United States Trade Representative.

“The imposition of the proposed tariffs could simply eliminate a growing along with job-producing market for vapor products, dismantling the growing import, distribution, along with retail network of which has been created within the last few years within the US along with has generated tens of thousands of jobs, along with tens of millions of dollars of taxes for the national along with state economies,” Brittani Cushman, vice president of external affairs for the vapor company Turning Point Brands, said during hearings Tuesday.

The Trump administration proposed a 25% tax on imported vaping devices in July as part of a brand new round of tariffs targeting $16 billion in Chinese imports. Trump’s first round of tariffs was aimed at high-tech along with industrial products along with went into effect earlier of which month. The tariffs are all part of an attempt to retaliate against China for allegedly stealing intellectual property belonging to US companies.

“We think tariffs on Chinese imports on of which particular industry aren’t going to yield any benefits the administration can be looking for,” Cushman told BuzzFeed News. “Instead the item’s going to boost prices for the consumer.”

Currently, vape devices coming from common brands like Juul, Vuse, along with MyBlu cost between $12 along with $50, with flavor cartridge packs selling for less than $20.

Seth Coblentz, general counsel for the e-cigarette design company VMR Products, told BuzzFeed News of which vapes are different coming from products like Whirlpool appliances, which already have manufacturing facilities within the US. If the tariffs on vapes were to pass, he said industry players could have to build brand new facilities to make the products.

“The notion of which manufacturing plants for these highly specific devices will pop up can be a miracle,” said Coblentz. “They won’t.”

The Food along with Drug Administration’s requirements for certain brand new products, including tobacco goods, create a barrier to building vape manufacturing plants, Tony Abboud, executive director of the Vapor Technology Association, a trade association representing the vape industry, told BuzzFeed News.

“Any company outside of China wishing to enter of which market could be unable to do so,” Abboud told BuzzFeed News. A company could have to meet currently undefined premarket authorization requirements set by the agency.

The FDA declined to comment to BuzzFeed News on its premarket review process. Instead, the item pointed to information on its site of which outlines what information companies must include in their applications. The agency’s brand new e-cigarette rules, passed in 2016, allow companies to continue selling their products if they were on the market in 2016, yet they must submit an application for review by 2022. along with any brand new products must be reviewed before they hit the US market.

“Companies could have to spend millions of dollars just to see if they get approval,” said Abboud. “No rational business anywhere within the planet will set up within the US today because they have no idea if they can get their product approved by FDA.”

The Trump administration’s aim at vape devices comes as the industry has dramatically expanded. E-cigarette sales hit roughly $860 million last year along with are anticipated to grow about 25% in 2018, according to a March equity research report coming from Wells Fargo.

Some vape companies, including Mistic along with White Cloud, have already moved some of their manufacturing of the devices to the US ahead of the FDA’s brand new premarket review requirements aimed at regulating ingredients, additives, along with chemical properties within the devices.

Chinese imports of vaping devices to the US amounted to $300 million in 2017, a 274% increase coming from the year before, when imports came in at $80 million, according to a BuzzFeed News analysis of USTR data.

The 13 warning letters FDA issued today to companies selling e-liquids of which resemble kid-friendly food products are part of an ongoing effort to protect youth coming from the dangers of nicotine along with tobacco products:

@FDATobacco / Via Twitter: @FDATobacco

The growing popularity of e-cigarettes has coincided with increased scrutiny over the tobacco products’ health effects along with appeal to minors.

Lawmakers like Republican Sen. Ron Wyden of Oregon, who was not involved with the tariff hearing Tuesday, have raised concerns around the lack of safety data on e-cigarette products imported coming from China. “The continued lack of standards means the health effects are unknown at best,” Wyden said in May 2017.

Vapes have also been known to explode unexpectedly, along with in one case of which year, a man died after his vape exploded. In April, the FDA cited 40 retailers for selling vape products to minors, along with in May the item issued warning letters to 11 companies of which sold e-liquids containing nicotine in packaging designed like kid-friendly food products, such as candies along with cookies.

States across the country, including Alaska, Vermont, along with Massachusetts, have raised taxes along with imposed regulations on the sale of vape products. San Francisco banned the sale of flavored tobacco products in June.

Reply comments to the testimonies heard at the US Trade Representative Office on Tuesday are due July 31. After the USTR reviews the comments, the item will announce whether the item plans to proceed with the tariffs on vape products imported coming from China.

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