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US president Donald Trump is doubling down on protectionism. Starting 1st August, sweeping new tariffs will hit around 20 countries, including European Union members, with rates ranging from 25% to 50% on strategic categories such as automobiles, steel, semiconductors and industrial machinery.
In this latest trade battle, one surprising absence stands out: China. The Asian giant, at least for now, is excluded from the new tariff package. But is this good news? The general impression is that the “non-news” about China isn’t cause for relief but that it’s yet another sign of a trade war still in full swing. In this climate, the nicotine industry – especially the “smoke-free” sector – remains an easy target.
In reality, China had already been hit by much more aggressive tariffs, even in excess of 100% in some areas, such as nicotine products. However, starting 14th May, goods imported from China into the US saw a 115% reduction. That means products with no additional tariffs now only face a 30% increase – a 10% flat rate on top of the prior 20% added in two 10% tranches in February and March of this year. This raised the tariff on products reliant on vaping hardware imported from China to 65% (30% from 2025, in addition to the 35% left over from the first Trump administration).
Not the last of the threats to the industry
The abrupt change in direction will do nothing to ease current uncertainty about long-term business and investment decisions. This is particularly the case given that the reduction is currently only a 90-day temporary suspension while further discussions are conducted between the two countries.
China’s exclusion from the new measures, therefore, should not be interpreted as a détente, but rather as a tactical choice. Trump appears to want to refocus his confrontation with Beijing, perhaps postponing further crackdowns in the face of renewed geopolitical tensions. For US companies operating in the nicotine sector – and which largely depend on Chinese supplies – the situation is critical.
Many companies are already evaluating alternative solutions: they might consider a relocation to Southeast Asia, supply chain diversification, or more sophisticated customs strategies. It’s a time of uncertainty, with trade stability increasingly tied to political sentiment. The chance of a further wave of tariffs against China in the coming months is real, and the nicotine sector will likely be among the first to be hit, considering its economic value and direct exposure to the Chinese market.
This exclusion of China isn’t a respite, then, but a strategic pause. Meanwhile, those working with inhalation devices or synthetic nicotine are already navigating a minefield, amid sky-high tariffs and chronic uncertainty. The question now is not if the next tariff wave will hit, but when, and how hard. For an industry already under fire, the clock is ticking.
– Antonia Di Lorenzo TobaccoIntelligence staff
Image: AI-generated
