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Trade relations between the US and Europe have been put on a 90-day pause, marked by a tense wait as both sides assess their next moves. After US president Donald Trump announced he would suspend the introduction of new 20% tariffs on all imports for 90 days, the European Commission (EC) decided to freeze the planned countermeasures for the same period, which included 25% tariffs on US products – including tobacco – worth €21bn.
Nevertheless, there is a fragile pause in a trade war that has not yet been resolved, with both sides watching developments in the coming months that could potentially involve the vape sector too.
EC president Ursula von der Leyen welcomed Trump’s decision to temporarily suspend the tariffs, calling it an important step towards stabilising the global economy. She reiterated the EU’s commitment to a “zero tariff” agreement on industrial goods to ensure predictable and mutually beneficial trade conditions. Despite the suspension of some measures, a US tariff of 25% on European steel and aluminium remains in place as well as a 10% tariff on other goods.
However, the EU is keeping its countermeasures ready, which could be activated if the negotiations do not produce concrete results. Although the vape industry’s products are not currently in the crosshairs, it is a vulnerable sector that could be targeted if tensions persist – especially if Trump expands his strategy and the EU has to look for other industries to put pressure on. The EU could decide to extend the countermeasures to sectors not yet affected – such as vaping – if, for example, the US added new surprise tariffs on European goods in the coming months. The US could target, for instance, cosmetics or pharmaceuticals, and the EU could respond by including e-liquids and vaping accessories.
Are import/export restrictions the next battlefield?
However, even without tariffs, trade tensions could lead to import/export restrictions with more stringent regulations, such as requirements for additional certifications for devices or liquids – creating customs delays, increasing costs and putting online or cross-border sales at risk. Also, considering that many components of vaping devices come from China and the US, the expansion of the conflict could also impact production and distribution on European soil.
The suspension of tariffs has not spared China; instead, Trump has raised tariffs on imports from China to 125%, “based on the lack of respect that China has shown for world markets”. Including pre-existing duties of 55%, this brings the total tariffs on Chinese vaping products to 180%. This decision was taken after Beijing responded to Washington by increasing tariffs on imported US products from 34% to 84%.
Many European countries are implementing stricter regulations against vaping products, especially single-use e-cigarettes. In Belgium, a ban on disposables came into effect in January, followed by France, which, after a shift towards stricter taxation, eventually opted for a ban that came into effect in February. Poland and Ireland are also considering bans on these products.
So, between the current (and possible future) restrictions and the looming threat of tariffs, will the vaping sector be the next target in this newly started trade war? The next few months will be crucial to clarify its fate.
– Antonia Di Lorenzo ECigIntelligence staff
Image: AI-generated
