VTA LEADS THE FIGHT AGAINST TARIFFS!
The Trump Administration has issued three lists of Harmonized Tariff Schedule (HTS) subheadings for products imported from China on which it proposes significant tariffs. Two of those lists
directly impact the vapor industry. From the beginning, your
Vapor Technology Association has been fully invested in the fight to convince the Trump Administration to remove the tariffs on vapor devices (List #2) and vapor components (List #3), when no other industry trade association has yet to oppose, comment or testify.
List # 2 - Vapor Device Tariff
On July 24, 2018, VTA’s Board President, Brittani Cushman, testified at the International Trade Commission before the United States Trade Representative and various Administration agency representatives in opposition to the 25% tariff that the Trump Administration proposed on finished vapor devices or kits.
Specifically, Ms. Cushman testified that, “the imposition of a 25% tariff would directly and radically increase the retail price of a vapor device, placing the burden of the tariff squarely on the U.S. consumer.” Further,
Inc.com covered Ms. Cushman’s testimony as follows: “The proposed tariff ‘would decimate this young and burgeoning U.S. industry,’ Brittani Cushman, president of the Vapor Technology Association, told the U.S. International Trade Commission at a recent public hearing.”
Then, on July 23, 2018, VTA submitted its
written objections (also known as comments) on USTR Docket No. 2018-0018 in opposition to the vapor device tariff contained in Harmonized Tariff Schedule 8543.70.99. Despite extensive opposition by companies in many industries, the Trump Administration only removed five of the 284 HTS subheadings from the original list of tariffs.
As such, on August 23, 2018, the 25% tariff on all finished vapor devices / kits went into effect. What this means is that as of August 23, any company importing a vapor device (complete kit) into the U.S. from China must pay an additional 25%.
List #3 - Vapor Component Tariff
While the Administration was considering the proposed tariffs on List #2, it announced a third and much larger list of proposed tariffs. List #3 included a proposed tariff of 10%, which the Administration shortly thereafter suggested increasing to 25%, on
all vapor components and parts. The tariffs proposed in List #3 would separately cover all parts, including coils, and components of vapor devices - mods, tanks, atomizers, cartridges/pods, mouthpieces (with or without nicotine). Notwithstanding the Administration’s decision on List #2, VTA continued to press the case.
On August 20, 2018, VTA Executive Director, Tony Abboud, was the lone industry representative
testifying at the International Trade Commission in opposition to the even more draconian second set of vapor tariffs being recommended by the United States Trade Representative. Mr. Abboud laid out the top 5 reasons (see insert below) that vapor parts should be removed from List #3. Those hearings, which occurred over 6 days and involved more than 375 witnesses, just concluded this week.
After his testimony, Mr. Abboud was interviewed on CCTV and explained why this issue was of great concern to all the manufacturers, distributors, importers and retailers in the vapor industry and the impact that this new tariff could have on vape industry consumers.
On September 6, 2018, VTA will submit its second set of written comments objecting to the new tariffs and asking the Administration to remove the subheading (HTS 8543.90.88), which includes vapor parts, from List #3. But, as was the case with List #2, the applicable subheading includes
other non-vapor products. For example, in List #3, the subheading covering vapor parts and components - HTS 8543.90.88 – also covers parts for
particle accelerators. For this reason - and given the USTR’s decision regarding List #2 - VTA believes that any comments presented on September 6, 2018, will not convince USTR to remove the HTS subheading covering vapor components issue from List #3. In other words, we fully expect the Trump Administration to impose new tariffs on the vapor parts and components outlined above in the near future. This tariff, which is separate from the 25% tariff being imposed on vapor kits, will be either 10% or 25% and will be applicable to the coils, tanks, mods, pods/atomizers, etc., that are imported separately from complete kits.
So What Do We Do?
Understanding the geopolitical realities of the tariff situation, VTA already has begun preparing its legal request to the Trump Administration to
exclude, i.e., remove, the HTS subheadings that are
specific to vapor devices and vapor parts from the lists of tariffs. This separate process will be pursued with the USTR. Under the eight-digit subheadings at issue, there are more precise 10-digit subheadings that specifically relate to vapor products. VTA will be making the case for vapor products specifically and will be submitting a formal request on behalf of its members to the Trump Administration to exclude specific products from the tariff list. That request will include the targeted information necessary to secure an exclusion which, if granted, will bring significant relief to the industry. All we ask from our members is that if you want to be included, respond to our requests for information.
This endeavor will be time consuming, costly to VTA, and difficult. But, just as it led the way by conducting the industry’s first full review of the science on flavors and cessation in response to the flavor ANPRM, VTA’s rapidly growing Board of Directors has stepped up again to defend the industry on this critical business issue.
If you have questions or would like more information, please email us at
guidance@vaportechnology.org.
Otherwise, stay tuned for more information and THANK YOU for all you do to defend vapor!