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Cannabis Industry Braces for Trump’s Tariffs

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[dropcap class=”kp-dropcap”]A[/dropcap]pproximately 70 to 90 percent of all vaporizer products are manufactured in China, and many companies on both sides of the Pacific Ocean will hit dead-on by President Donald Trump’s trade war with China. There’s little escape from the effects of a trade war, when vape pens and products make up one of the fastest-growing markets within the cannabis industry. Currently, 91 percent of vape products in the United States are imported from China.

Last June, the Trump administration released a list of $200 billion worth of Chinese goods that will subject to 10 percent tariffs. Then he proposed raising some of the tariffs to 25 percent. China quickly retaliated, imposing tariffs on $60 billion in American goods.

Come August 23, 279 product categories of Chinese imports will be subject to raised tariffs.

Chinese products regularly pour into the West Coast through ports along the coast. “The Trump tariffs will undoubtedly hurt the rural parts of Washington State,” Greg James, publisher of Marijuana Venture and Sun Grower, told Forbes. “There could well be a snowball effect that results in the outdoor growing community having an even harder time selling their crop,” he said.

Arnaud Dumas de Rauly is Co-CEO of The Blinc Group. Dumas de Rauly testified at The Office of the U.S. Trade Representative public hearings about how medical cannabis patients will be affected. “25 percent of sales come from cannabis vaping products,” Dumas de Rauly said.

Writers from exclusive vape industry websites have expressed worry about what the tariffs will spell for the future of vaping. “Yes, it will hurt consumers, yes, it will hurt the industry,”  Tony Abboud, president of the Vapor Technology Association, told Vaping Daily.

Cannabis businesses in particular could be affected, given the extra hurdles they must overcome including the inability to deduct business expenses from taxes. The tug-of-war game with China isn’t helping anyone in the cannabis and vaporizer industries.

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