Bryan Robbins smoked for 35 years before vaping helped him quit and prompted him to ditch driving trucks for selling e-cigarettes, first at flea markets and then at his own retail shops in Mississippi.
The 52-year-old is a supporter of US President Donald Trump who agrees with the president’s efforts to crack down on China’s trade practices, but it is hitting close to home.
The next round of proposed duties — 25 percent on US$16 billion of Chinese imports that could go into effect in a month — includes vaping devices. Most e-cigarettes are made in China, leaving Robbins and his peers without an alternative.
Photo: Bloomberg
“It might be good for the trade deficit in the long run, but how many stores is it going to put out of business in the short term?” Robbins said.
Robbins, whose e-cigarette devices sell for US$25 to US$130, said the tariffs would mean higher prices that would depress sales — hampering the growth of a market that is still nascent.
He and other advocates are pressing the Office of the US Trade Representative to spare the devices on the grounds that they will cost US jobs, will not change China’s trade behavior and could push more people to go back to smoking cigarettes.
The potential tariffs would hit the surging industry as it faces efforts by the US Food and Drug Administration (FDA) to limit sales to minors and regulate vaping flavors. A slowdown would also hurt malls and shopping centers, where vape shops have been a bright spot by filling empty spaces from store closings and retail bankruptcies.
“Yes, it will hurt consumers; yes, it will hurt the industry,” said Tony Abboud, executive director of the Vapor Technology Association, a trade group representing more than 600 manufacturers, wholesalers, distributors and retail shops. “It is a dramatic impact, especially for anybody who’s low or middle income.”
The tariffs would also affect device makers like Juul Labs Inc, by far the hottest brand. Even though Juul and others make more money from selling the pods of liquids that go into the vaporizers — with a majority of the pods manufactured in the US — than from the devices, higher levies would still hurt.
Juul’s vaporizers, which cost about US$35, are made in Shenzhen, China.
The company declined to comment, and referred questions to the association.
Tobacco giants such as Reynolds American Inc, Imperial Brands PLC and Altria Group Inc also sell vaping products.
Imperial said is evaluating how to minimize the effect of the proposed tariffs.
Reynolds declined to comment and Altria did not respond to requests for comment.
Adding tariffs on e-cigarette devices would not meet the administration’s goal of addressing allegations of Chinese intellectual property theft, vaping advocates have said, nor would it boost US jobs.
There is no realistic prospects for anyone to open a factory in the US until a 2022 deadline by the FDA clarifies which products are approved for sale in the country, they have said.
Small store owners like Robbins are set to be among the latest victims of Trump’s trade war with the US’ largest trading partner, and the vaping industry is joining retailers, manufacturers and other groups in opposing the duties as a tax on consumers.
On July 6, the Trump administration enacted 25 percent tariffs on US$34 billion of Chinese imports. China retaliated, and four days later the US proposed 10 percent duties on US$200 billion in additional goods.
Vaping advocates have asked to testify at a public hearing in Washington on Tuesday and Wednesday next week on the next round of 25 percent tariffs, which includes their products. Robbins is among more than two dozen shop owners, customers and advocates from 10 states who submitted online comments opposing the proposal.
While the US produces e-liquid for vaping, most of the devices, parts and components sold in the US are manufactured in China, said Gregory Conley, president of the American Vaping Association, a nonprofit advocacy group.
About 91 percent of the US$342.3 million customs value of US e-cigarette imports came from China in 2016, a US Government Accountability Office report showed.
The sector had really just started to take off. Sales in the US of e-cigarette devices increased 68 percent to US$1.7 billion in the year ended last month, after rising 32 percent last year, Industrial Research Institute data showed.
Including e-liquid pods and batteries, industry sales last year rose 15 percent to US$5.4 billion, BIS Research said, adding that convenience and grocery stores made up the biggest chunk of that with US$1.7 billion, followed by vape shops at US$1.1 billion.
Industry advocates have said the profit margin on the products is thin and a 25 percent tariff would get passed along to consumers and diminish purchases at the estimated 10,000 US vape shops.
The duties could also hurt public health, because higher costs for e-cigarettes would discourage switching from smoking, they have said.
James Jarvis, part of a group of 21 vaping store owners in Ohio and president of the state’s Vapor Trade Association, said at least one of his shops would close for those reasons.
“The sales just aren’t there, and if I have to take a price increase in an area that’s already struggling economically, I won’t have business left,” Jarvis said.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS