Starting August 23, the U.S. will impose a 25 percent tariff on $16 billion worth of Chinese goods, with an emphasis on electronic products, including e-cigarettes and vaporizers. As reported by the Washington Times, “Officials in Shenzhen say that more than 100 companies in the province produce over 90 percent of the global e-cigarettes.”
The new tariffs will directly hit companies like Convectium, a manufacturer of vape cartridges, batteries, filling and capping machines, and packaging systems for cannabis retailers. Danny Davis, founder and CEO of Convectium, explained the scope of this impact: “All Convectium products are engineered in the U.S., but several are produced in our factories in China and then imported. This is the industry standard so we know we are one of many being impacted.”
Davis was not the only industry leader that told us about the importance of manufacturing in China to the success of their company. Arnaud Dumas de Rauly, Co-CEO of The Blinc Group, elaborated on how this will be impacting the cannabis industry. saying, "The rationale behind this administration's trade war against China is twofold: Stealing American jobs and stealing American IP & know-how. However, as it pertains to vaping products, neither of these are in the USA to begin with—they have always been in China.”
The impact these tariffs will have on vaporizer manufacturers and consumers is inevitable. Businesses will be forced to lose money due to the increased costs, or consumers will pay more for products like batteries and vape cartridges.
Mr. de Rauly anticipates that vape hardware, which already has low profit margins hovering between 10-15 percent, will drive the cost of the tariffs to be passed onto consumers. Mr. de Rauly also anticipates that “this will limit patient/consumer access to cannabis products, especially in states like Florida and New York whose medical programs rely on vaping products.”