On April 9, the United States officially enacted a new round of tariff hikes on Chinese imports, adding fresh pressure on the cost structures of cross-border e-cigarette logistics. In an exclusive interview with 2Firsts, a logistics professional known as “L” (alias) provided insights on how the new tariffs are reshaping the e-cig supply chain, influencing freight rates, and prompting businesses to rethink their strategies.
Minor Freight Rate Adjustments, Market Reacts Calmly
Following the tariff changes, logistics providers have already begun adjusting shipping rates. According to L, ocean freight costs at their company rose from 19 RMB/kg to 21 RMB/kg, and air freight climbed from 55 RMB/kg to 57 RMB/kg—an increase of no more than 2 RMB/kg across the board.
Interestingly, while the tariffs have added roughly 8 RMB/kg to costs, current off-season shipping rates have dropped by about 6 RMB/kg, effectively offsetting most of the impact. “The net cost increase is just 2 RMB/kg,” L explained, noting that this has been met with little resistance. “So far, we haven’t seen a decline in order volumes. The e-cigarette sector is less sensitive to logistics cost fluctuations compared to traditional trade. A 2 RMB/kg hike is still within the acceptable range, especially for higher-value products.”
Grey Channel Cushions Impact—But Fully Compliant Players Face Strain
The industry’s response to the tariff change is heavily segmented, says L.
- Grey channel shipments: Those declared as nebulous categories like “vape accessories” benefit from significantly lower effective tax rates, allowing many companies to save more than 10% compared to fully legal routes.
- Fully compliant channels: These face a steep tariff burden (base rate of 27.6% plus surcharges), with logistics costs accounting for as much as 80% of the product value—directly impacting market competitiveness.
“For now, we haven’t seen mass back-tax collection cases in the grey market,” L noted. “But it’s only a matter of time. If U.S. Customs tightens inspections, the current tax-inclusive pricing model could be turned on its head.”
More Price Hikes Expected in Peak Season
While current freight rate increases appear modest, most in the industry believe the upward trend isn’t over. L outlined a few key factors to watch:
- Post-policy recalibration: Between April 10 and 14, logistics providers may revise prices again based on finalized tax documents, with high-tariff items potentially rising by 5 RMB/kg.
- Traditional peak season spikes: Air freight rates could exceed 70 RMB/kg during Amazon Prime Day (July) and holiday stocking (September), representing a 20%+ jump from current levels.
- Shrinking cost buffer: Though air freight prices are still about 30% lower than pandemic-era highs, capacity constraints during peak season could quickly erase this advantage.
To mitigate future risks, L’s company has advised clients to expedite shipments by mid-April if products are ready, in order to avoid potential surcharges and overlapping policy effects.
Long-Term Risks and Structural Challenges
During the conversation, L pointed to two looming industry concerns:
- Sustainability of grey channel logistics: With mounting U.S. pressure on illegal imports and lobbying by major tobacco players to regulate the market, current loopholes may soon close.
- Tax-inclusive shipping under stress: Logistics companies that absorb tariff liabilities may face serious financial exposure. If the back-tax per shipment exceeds freight revenue, some may resort to abandoning goods—placing brands at operational risk.
L’s advice to e-cigarette brands: “Build a resilient, diversified logistics strategy. Use air freight for high-demand SKUs to maintain turnover, and shift slower-moving products to sea freight to cut costs. Also, closely monitor U.S. customs classification changes and plan your declaration tactics in advance.”
As of April 9, the White House confirmed a 104% tariff on select Chinese goods, a move that underscores the growing trade tension and its ripple effects across global supply chains—especially for niche categories like e-cigarettes.
