Recently, the US government's policy of imposing high tariffs on Chinese products continues to escalate, with accumulated tariffs reaching as high as 145% (20% base tariff + 125% additional tariff). This measure has also triggered a chain reaction in the e-cigarette industry, with the impact on the industry receiving particular attention. In response, 2Firsts conducted interviews with various participants in the e-cigarette industry chain to analyze the effects of the tariff hikes on the industry.
Some manufacturers: orders slashed, logistics costs soaring, shipments blocked
As one of the core components of e-cigarette products, battery suppliers are among the hardest hit in the current tariff turmoil. A certain e-cigarette battery manufacturer revealed to 2Firsts that after the implementation of the tariff policy, their company's order volume plummeted dramatically, with a decrease of around 50%. Behind this data is the cautious purchasing strategy of clients operating in the American market under cost pressures.
For CBD companies in the American market, the increase in tariffs is not only causing product prices to rise, but more importantly, it is significantly increasing logistics costs. A CBD manufacturer told 2Firsts that air freight costs have increased significantly due to the impact of tariff policies, making many manufacturers hesitant to ship easily. On one hand, high transportation costs are squeezing manufacturers' profit margins; on the other hand, the uncertainty of shipments is increasing the operational risks for companies.
Senior industry experts: Top enterprises are "going abroad" to seek refuge, while small and medium-sized enterprises are facing challenges
A seasoned e-cigarette industry insider told 2Firsts that many leading e-cigarette companies have already built factories in Southeast Asian countries like Indonesia as a backup production solution, so the direct impact they face is relatively small. However, he also expressed concerns about the potential for the U.S. government to implement tracing measures. If tracing policies are enforced, these companies' overseas operations may encounter new regulatory risks.
For companies that do not have factories in Southeast Asia, although they can enter the US market through transit, they need to bear the additional cost of transferring tariffs, which undoubtedly increases the operational burden of the company. Take Indonesia as an example, Indonesia imposes a 10%-40% tax on imported e-cigarette products, while the US imposes a 32% tariff on Indonesia. This means that the tariff for Chinese e-cigarettes transiting through Indonesia to the US is at least 42%, or even higher.
There are also concerns from industry professionals that the high tariffs will have a particularly significant impact on small and medium-sized enterprises. These businesses are relatively weaker in terms of financial strength, risk resistance, and market bargaining power, and may be eliminated from the market under the current round of tariff shocks. This will lead to an accelerated reshaping of the e-cigarette industry landscape, further increasing industry concentration, and shifting market share towards leading companies.
Wait-and-see period in policy uncertainty
Despite the turmoil in the industry chain, most companies still maintain a cautious attitude. Industry veterans point out that due to the unpredictable decision-making style of the Trump administration, many people are currently in a wait-and-see period. Everyone is closely watching the direction of US policies in the next 2-3 months in order to make more precise response strategies.
Further Reading:
The cover image was generated by AI.
On the afternoon of April 16th, 2Firsts will hold a closed-door seminar in Qianhai, Shenzhen, entitled "Eye of the Storm: Trends in the Dual Challenges of New Tobacco Regulations and Tariffs in the United States by 2025, as well as a PMTA Technology Analysis on Nicotine Pouches.
The seminar is divided into two parts. The first half focuses on "Nicotine Pouch PMTA Technology Analysis," inviting industry experts to analyze the technical solutions, policy details, and market dynamics of nicotine pouches in depth. The second half will focus on the theme of "Eye of the Storm: Interpretation of the Trends of the 2025 American New Tobacco Regulations and Tariff Double Challenges." Compliance experts from the United States will be on-site to delve into the trends of American new tobacco regulations, along with experts from 2Firsts and several online experts.
Of particular note, the seminar has added a new theme "Interpretation of U.S. Tariff Policies and Strategies for New Tobacco Companies" where experts will thoroughly analyze U.S. tariff policies and provide practical strategies for companies to respond.
Seats are running out soon, click to register now and secure your exclusive seat, seize the opportunity!
Registration link: https://www.huodongxing.com/event/8801160799900
We welcome news tips, article submissions, interview requests, or comments on this piece.
Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn
Notice
1. This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.
2. The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.
3. This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.
4. Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.
Copyright
This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.
For copyright-related inquiries, please contact: info@2firsts.com
AI Assistance Disclaimer
This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.
We welcome any corrections or feedback. Please contact us at: info@2firsts.com
