New 10% Levy Compounds Existing 25% Tax on Electronic Nicotine Delivery Systems

Effective February 4, 2025, the United States imposed a new 10% tariff on a wide range of products imported from China, including the majority of vaping devices used by American consumers. This additional levy, the first punitive measure taken by the second Trump administration, comes on top of an existing 25% tariff that has been in place since August 2018.

The combined 35% tax applies to all Chinese-made electronic nicotine delivery systems (ENDS), such as mods, batteries, pod-based devices, and disposable vapes, classified under Section 301 of the Harmonized Tariff Schedule of the United States (items HTS 8543.70.9930 and HTS 8543.70.9940).

China Retaliates with Tariffs on U.S. Goods

In response to the U.S. action, China swiftly implemented retaliatory tariffs on key American exports, including a 15% levy on coal and natural gas and a 10% tax on crude oil, farm machinery, and certain automobiles. The U.S. tariffs include an anti-retaliation clause that allows President Trump to further increase the 10% rate or introduce additional tariffs if China escalates the trade dispute.

Tariffs Burden American Businesses and Consumers

Contrary to popular belief, tariffs are not taxes on foreign countries but rather on American consumers. As import taxes added to products from abroad, they are designed to give U.S. manufacturers a competitive advantage by making foreign goods more expensive. However, since mass-market vape devices are not produced domestically, the tariffs will ultimately burden American importers, wholesalers, retailers, and consumers through higher prices.

According to the Tax Foundation, the Trump administration’s tariffs from 2018-2019 constituted “one of the largest tax increases in decades.” The extension of these policies by the Biden White House and the introduction of new levies have further compounded the impact on businesses and consumers.

• Read more: Vaping Industry Navigates Global Trade Tariffs Impact

Potential Impact on Vape Prices

The immediate effect of the new 10% tariff on vape prices may be muted, as manufacturers, importers, and wholesalers could absorb some of the cost depending on product profit margins. Chinese parts suppliers may also temporarily lower prices to help manufacturers maintain profitability. However, if the U.S.-China trade war continues to escalate and additional tariffs are imposed, consumers are likely to feel a more significant impact.

As inflation persists, the cumulative effect of tariffs on Chinese vape products could lead to notable price increases for American vapers. While the industry has demonstrated resilience in the face of past economic challenges, the ongoing trade tensions and regulatory uncertainty pose significant risks to businesses and consumers alike.

Policymakers must carefully consider the unintended consequences of tariffs and work towards a resolution that balances national economic interests with the needs of American businesses and consumers. As the vaping industry continues to evolve, it will be crucial to monitor the impact of trade policies and advocate for fair and reasonable treatment of this innovative and rapidly growing sector.