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.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS