New tariffs hit vapes hard
America is in the middle of a trade war and foreign powers are fighting back with new tariffs. Recently announced tariffs proposed by president Trump are poised to make importing some manufactured goods from China more expensive. But the move sparked political and economic backlash with more tariffs announced in response.
The escalating trade war against China and other countries is about to hit cannabis consumers with higher prices. Modern cannabis consumers increasingly rely on vaping devices, batteries, filters and cartridges. Higher import taxes mean higher prices when checking out at the vape shop.
Heavy vapers could see significantly higher prices in the coming months for consumables manufactured in other countries. But the longer the trade war wages on, the more consumers are going to feel the pinch. Nobody understands this better than Arnaud Dumas de Rauly, the Co-CEO of Blinc Group.
Companies walk a fine line
Dumas de Rauly has a long list of clients looking for vaping hardware. His company sells technologies and products related to vaping nicotine and cannabis. There is also his incubator program that helps develop, research and brand tech for the vape industry.
The vape research, development and branding company Blinc Group CEO recently testified that the policies put in place by the Trump White House will impact consumers. Dumas de Rauly testified as part of the Office of the U.S. Trade Representative public hearings. The hearings specifically deal with the new tariffs and their impact on American businesses.
In his testimony, Dumas de Rauly claimed that the proposed tariffs would have consequences beyond simply higher consumer costs. He pointed out that “25% of sales come from cannabis vaping products”. In 2017 Colorado collected $247M in cannabis taxes and the increased cost could lead to decreasing sales and less income for the states.
The cuts go deep
It’s more than just the people making and selling vaporizers that will feel the impact of the new tariffs. Consumers should feel the squeeze every time they go to the shop. But shop owners also need to prepare for increased prices on the supply side and reductions in consumer demand.
Since the tariffs target Chinese imports, anyone who relies on cheap foreign goods to do business is going to feel the pinch. Higher prices and lower demand for everything from carrier services to accounting and cell carriers will put additional strain on the market and could negatively impact consumer confidence. If it doesn’t right itself, the market can get into a death spiral that reduces access to all but the wealthiest.
The full impact of the new tariffs will only become apparent after they go through. A heavy response from China could deepen hostilities, increasing import costs further. It also isn’t clear if this is the limit of sanctions the U.S. and China intend to impose or if more will follow. If relations continue to chill, it could put spell doom for many entrepreneurs and small businesses that rely on vape sales.
