As you likely know, the Trump administration has been in a battle of tariffs with China in recent weeks. Could this trade war affect your vaping habit? Experts seem to think so.
The administration’s threat to impose 25 percent tariffs on $200 billion worth of products imported from China would be in addition to the $50 billion already imposed, and because most vape manufacturers depend on Chinese manufacturing, the prices of vapes are likely to increase.
How much does the vaping industry depend on China?
Manufacturers of vaporizers in the United States depend on China, relying on them to make up 91% of all imported vaping products (according to most recent data available). Originally sometimes called “e-cigarettes,” the vaping market first emerged in China. Vaping, usually seen as a safer form of “smoking,” is popular not only because of the perceived health benefits, but also because it can be significantly cheaper than smoking.
Manufacturers have recently begun adding new health warnings to packaging, and as a result, the growth of the business has already started to slow, creating a complex timing issue for the industry. The industry estimates current proposals to raise the price of vaping products by 15 percent. Tobacco Control recently published a study showing a decline in sales between 12 and 19 percent could be expected with just a 10 percent price increase. The added 5% that products are expected to rise may mean not only an inconvenience for users, but it could also price “experimenters” out of the market, and possibly right back into the arms of big tobacco.
Will the trade war make vapes more expensive?
It is unclear how companies plan to curtail the rising cost and how much of it will be passed to the consumer. Because the United States has too few workers with the specific expertise to make the products, simply moving production location is not an option. As a result, it is likely to affect more than just the price you pay at checkout. Some stores have expressed concerns over the choice of raising prices and potentially losing customers, or eliminating some of the work force to balance their budgets. Put simply, those working in the industry could face layoffs and unemployment.
One of the industry’s biggest companies, Juul Labs (we’ve reviewed them in the past), held about 68 percent of the market last quarter. The company has declined to say which, if any, product prices would increase. Juul’s chief legal officer, Gerald Masoudi, did state that no manufacturers outside of China would be able to supply the volume needed by the company. Experts claim that it is virtually impossible for prices not to increase across the board, and smaller companies are expected to take the initial, and biggest, hit.
According to estimates, a $10 refill cartridge will likely cost around $12.50, and a $40 vaporizer will likely cost around $50.
