Tobacco Asia

20 tobaccoasia Issue 4, 2025 July / August By Timothy S. Donahue When James Xu surveys the global land- scape of vaping and heated tobacco prod- uct manufacturing, he sees uncertainty more than opportunity. "It's a mixed bag," says Xu, the founder of the once largest vape retailer in the United States, Avail Vapor. Xu is now developing his own vaping brand, Fav, that has no affiliation with Avail. "Some shops overseas are opening; others are shutting down," he says. "Nobody knows what to do next." This air of volatility isn't unique to Xu. Companies across the nicotine prod- uct supply chain—from hardware makers in Shenzhen to e-liquid firms in Califor- nia—are grappling with a volatile com- bination of rising tariffs and tightening regulatory scrutiny. For years, Shenzhen, China, was the unquestioned hub of global vape production. But now, with US import duties on Chinese vaping goods soaring to as high as 145% before recently dropping to 30% under a 90-day tariff pause, companies are Tariffs, Tobacco, and a Shifting Global Supply Chain being forced to make hard decisions. It's just a short-term pause, according to Xu. "You can't make multi-million-dollar deci- sions based on a three-month window. That's why most companies are sitting still," Xu says. "Every- body thinks it's not sustainable. Not for the US, not for China. It's a lose-lose situation, but the US has more to lose overall." Despite the recent tariff relief, Xu sees no immediate end to the tension. "Even Trump and the secretary of commerce know it's not sustain- able," he says. "But now it's about saving face. Trump can't walk it back without looking weak." A broken system Xu is blunt in his assessment of the trade war's impact. "It's not sustainable—for either side," he says. "It's just stabbing each other." He describes visiting US stores like Tractor Supply and seeing shelves partially empty. "Before you know it, we'll have no medicine here, because all the raw ingre- dients come from China," he says. "This whole thing is just crazy." Xu's frustration is not limited to US policy. Chinese regulation has become increasingly bur- Companies across the global supply chain— from hardware makers in Shenzhen to e-liquid firms in California—are grappling with a volatile situation. Credit: Manfred Schindler, Pixabay. "Many companies have tried to assemble consumables [in the US], but it's too expensive… and…there's] no incentive to invest millions when a new [US] president could reverse the rules in a few years." —James Xu, Avail Vapor

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