Chinese vape companies that manufacture disposable e-cigarettes are on pace to avoid more than $2 billion in tariffs on these goods in 2025.
This tariff evasion scheme is possible because China effectively smuggles disposable vaping devices into the U.S. by mislabeling them as toys, electronics, and even shoes.
According to one recent report, over 90 percent of all Chinese vape products imported to the U.S. in 2024 were not recorded in American import data, with U.S. state attorneys general warning that widespread mislabeling is being utilized by the Chinese companies to avoid customs duties and regulations. The Chairman of the Republican party of Miami-Dade County recently warned that Florida is the top state for the sale of illegal vapes from China.
China exported more than $3.7 billion worth of e-cigarettes to the U.S. in 2024 – almost a $700 million increase since 2022. However, U.S. import data only recorded receiving about $333 million worth of these goods, a projected trade discrepancy of roughly $3.4 billion. That discrepancy is on pace to grow to about $3.6 billion in 2025.
According to Reuters, the Chinese city of Shenzhen is the biggest source of vapes, both legal and illegal, coming into the United States. In 2024, China exported more than 26 billion yuan ($3.6 billion) in vapes to the U.S., according to Chinese customs data.
But U.S. customs figures show only $333 million in Chinese vapes were officially received in the U.S. that same year. Mismatches in custom data between the U.S. and its trading partners are not uncommon, but a 90 percent gap is unusual, two customs data specialists told Reuters.
Taking this discrepancy and multiplying it by tariff rates on Chinese e-cigarette products (around 60 percent) results in a tariff evasion amount of more than $2 billion for the year. That would make it the largest case of duties evasion in U.S. history, surpassing the $1.8 billion fine paid by aluminum companies for avoiding duties on Chinese aluminum in 2022.
The evasion scheme is likely to draw the ire of the Trump administration and its tariff agenda.
On May 12, Treasury Secretary Scott Bessent announced a 90-day pause on trade escalations with China, reducing Trump’s initial, 125 percent tariff on the country to 10 percent.
That pause will be up for review in August — and with Chinese vaping companies committing an end-run around tariff duties, with potentially hazardous products that lack FDA approval in the U.S., the previously niche world of vaping could soon have a big impact on trade policy.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
