Chinese-Made Vapes Now Subject to 35% Tariff

The first punitive tariffs on Chinese products imposed by the second Trump administration took effect Feb. 4. The new tariffs impose an across-the-board 10 percent levy on products from China, including the vast majority of vapes used by American consumers.

China reacted immediately, imposing a retaliatory 15 percent tariff on coal and natural gas, and 10 percent on crude oil, farm machinery and some automobiles. The U.S. tariffs include an anti-retaliation clause, according to law firm Sidley Austin, allowing President Trump to increase the 10 percent tariff, or add new tariffs, in response to any Chinese escalation.

Tariffs are taxes paid by consumers

Tariffs are import taxes added to products imported from other countries, intended to give an economic advantage to American companies making similar products by increasing the consumer cost of the foreign products. But since mass-market vape devices aren’t manufactured in the United States, the tax will simply punish American importers, wholesalers, retailers, and ultimately consumers.

Many people misunderstand tariffs, believing them to be taxes on other countries. In fact, they are taxes on American consumers, paid in the form of higher prices. According to the Tax Foundation, the 2018-19 Trump tariffs amounted to “one of the largest tax increases in decades.”

Chinese vape products now have a 35 percent tariff

For vapers, the new 10 percent tariff will be added onto an existing 25 percent tariff that was imposed during the first Trump administration and extended by the Biden White House (Biden also added additional tariffs on China). Vapers have been paying the 25 percent surcharge on Chinese vape products since August 2018.

Both tariffs apply to all Chinese-made vape devices, including mods, batteries, and pod-based and disposable vapes. The tariffs fall under Section 301 of the Harmonized Tariff Schedule of the United States—items HTS 8543.70.9930 and HTS 8543.70.9940.

Vape prices may not increase immediately because of the new 10 percent tariff, and it could have a very low impact on prices, depending on a number of variables. 

In 2018, Mi-Pod co-founder Geoff Habicht explained to Vaping360 that tariffs might be partially absorbed by the manufacturer, importer or wholesaler, depending on the profit margin of any particular product. Parts suppliers in China could also temporarily lower prices to manufacturers to help them remain profitable.

The new 10 percent tax could go almost unnoticed by consumers in a time of inflation, but if the trade war with China continues to escalate, any additional levies on Chinese products are likely to have more effect.