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Is a Trump trade war with China the next big threat to the vaping industry?

Posted by Matt Rowland on

 

The American vaping industry was largely supportive when Donald Trump officially won the U.S presidency on November 8.  Among his many, often controversial, political stances, the billionaire real estate developer has long been an opponent of what he calls “excessive federal regulations,” regardless of the industry.

With a stroke of a pen just days after entering the Oval Office, Trump signed an executive order promising a “one-in, two-out” approach to federal oversight which promises to repeal two regulatory requirements for every one that is passed.   This is considered potentially good news for the American vaping industry, which has been consistently under fire by sweeping FDA deeming regulations that threaten to wipe out tens of thousands of small businesses by 2018.

China-based SEVIA-USA supports repeal of FDA deeming regulations

Almost immediately after Trump’s unexpected win, individual vape enthusiasts and vaping advocacy groups like the Shenzhen Electronic Vaporizer Industry Association (SEVIA-USA) began contacting GOP leaders.  They began pressuring political officials to place the FDA deeming regulations high on the list for quick repeal, and the recently signed presidential executive order of January 30 seems to be a positive sign that things are moving in the proper direction.

(Related Article:   PRESIDENT-ELECT TRUMP HAS A ‘SUGGESTION’ WEBSITE, AND VAPERS ARE FLOODING IT WITH IDEAS)

The China-based SEVIA is an advocacy group that supports “a regulatory path…to enforce industry standards to assure consumers safety and confidence in Chinese manufacturing.”  And even SEVIA has openly and consistently campaigned for the overturning of the FDA deeming regulations almost from the very beginning.  

“On September 3rd, SEVIA (Shenzhen Electronic Vaporizer Industry Association) held a conference in Shenzhen, the heart of electronic cigarette industry, to discuss the FDA deeming regulations and the latest status of the lawsuit that SEVIA USA financially supported. Innokin, as the founder of SEVIA and SEVIA USA, was proactively engaged in organizing and participating in this historic event.”

But there is a new wrinkle in the plan.  Trump does not seem to be making friends with China, and China just happens to manufacture and distribute the lion’s share of vaping technology sold throughout the world.  If Trump starts a trade war with the vaping industry’s biggest supplier, what happens next – even if the FDA deeming regulations are successfully repealed?

China tells Trump:  One China policy is non-negotiable

In the final days of the Obama Administration, President Donald Trump made international headlines when he suggested that the One China policy regarding Taiwan is “negotiable.” It all started when he broke with decades of presidential tradition by accepting a congratulatory phone call from Taiwan President Tsai Ing-wen.

(Related Article:   CHINA: VAPING’S SECRET WEAPON TO BATTLE THE FDA E-CIG REGULATIONS?)

This action angered the Chinese government.  Since 1979, no U.S. President has ever interacted with Taiwan without first going through the appropriate Chinese political channels. China’s Department of Foreign Ministry immediately lodged an official complaint with the United States before issuing a rather bold statement of their own.

"There is only one China in the world. Taiwan is an inseparable part of Chinese territory, and the People's Republic of China is the sole legitimate government representing China.  These are facts recognized by the international community and no one can change this."

-Lu Kang, spokesperson for the Chinese government

Meanwhile, Donald Trump was also taking on leaders of both American and Chinese Commerce.  He’s threatened a massive tariff of perhaps 20 percent or more for any U.S. company that outsources jobs to foreign nations – including China.  And he’s even taken on Apple CEO Tim Cook and the rest of Silicone Valley by suggesting that certain financial “incentives” might be offered if these companies moved many of their jobs back to the United States

Trump threatens 45 percent tariff on Chinese imports

During one of the presidential debates, Donald Trump stated that China could face an import tariff of a whopping 45 percent “if they don’t behave.”  He was referring to an existing trade deficit that exists between the two countries.  China exports considerably more products to the U.S. than the U.S. exports to China.

Not only would this massive tariff be bad for the American vaping industry, Silicone Valley would feel the heat, as well.  The Wall Street Journal notes that components for the Apple iPhone are not only manufactured in China but throughout East Asia.  A 45 percent tariff would send Apple’s shipping costs through the roof, which would translate into higher prices for the average American consumer.

(Related Article:   FDA EXTENDS DEADLINE FOR DEEMING REGULATIONS AMID RUMORS OF A TRUMP REVERSAL)

The same would be true for vaping technology.  If Donald Trump slaps a 45 percent import tax on all vape mods, batteries, and atomizers made in China, the average American vaper would feel the financial pinch in the way of skyrocketing prices.

Assuming that the Trump Administration will eventually repeal the FDA deeming regulations, the American vaping industry might be facing a more imminent threat.  If Trump deregulates e-liquids while simultaneously triggering a trade war with China, the vaping landscape begins to look very different.  E-juice flavors will be cheap and plentiful, but the devices will theoretically cost much more.

(Related Article:   BREAKING NEWS: CHINA BANNING E-CIGS. APRIL FOOLS!)

 


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The opinions expressed in this article are those of the author's and do not necessarily represent the viewpoints, policy or company position of Vapes.com, the rest of our staff, and/or any/all contributors to this site.



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