E-Cigarettes Also Included on Trump’s Tariff List in the US-China Trade War

President Trump’s tariff actions against Chinese products primarily target supply chain links, largely avoiding consumers. However, the tariff list hides some unexpected items, from Google Nest thermostats to e-cigarette devices, and even music equipment used by rock stars.

In the escalating tit-for-tat trade war, the U.S. threatens to impose import tariffs on up to $450 billion worth of Chinese products, with the first $34 billion set to take effect next month.

The first round of tariffs attempted to avoid consumer-end products, indicating a careful strategy to avoid taxing voters directly.

However, analysis by Reuters shows that some consumer goods will be affected. If the Trump administration expands the scope of tariffs to the threatened $450 billion, it will inevitably impose tariffs on nearly all products. The U.S. imported $506 billion worth of Chinese goods last year.

“When it reaches $200 billion, it will start affecting products consumed by every family member,” said Hun Quach, vice president of international trade at the National Retail Federation.

Reuters analyzed 1,102 products targeted by the U.S. Trade Representative’s office and found that only 1% of the products subject to a phased 25% tariff starting July 6 were “consumer goods.”

According to the OECD’s product classification, most of the targeted products fall into the categories of “capital goods” or “intermediate goods.”

The idea behind the U.S. is to force companies to move their supply chains out of China or improve efficiency to offset cost differences. However, industry leaders say that ultimately, American consumers will still be harmed.

“From our perspective, no matter where tariffs are imposed in the supply chain, it ultimately taxes Americans,” said Josh Kallmer, senior vice president of global policy at the Information Technology Industry Council (ITIC), which represents large tech companies.

For example, the Google Nest smart thermostat is classified as an imported “capital good” and will be subject to tariffs. The Nest thermostat is assembled in China and sells for around $250 in the U.S.

The $300 million annual import of Chinese-made e-cigarettes and the $16 million electronic effects pedals favored by rock bands will also be affected.

According to the OECD’s product classification, these two products fall under the $1.1 billion miscellaneous category of U.S. electrical equipment and are subject to the second round of $16 billion tariffs.

The Buick Envision, a midsize SUV under General Motors (GM.N), is also on the list. The Envision is produced in China and sold 41,000 units in the U.S. last year.

Volvo cars produced in China are also at risk of U.S. tariffs, but the company has recently started its own production activities in Southern California.

The U.S. Trade Representative’s office (USTR) said last week that, so far, mobile phones have been excluded from the list. This means that iPhones assembled in China by Apple will not be affected. Research firms Counterpoint and IHS Markit reported that last year’s import value was about $61 billion.

Not only Chinese companies are affected

A study by Mary Lovely, an economics professor at Syracuse University, found that most companies hit by the first round of tariffs are American firms.

She and researcher Yang Liang found through studying China’s export data that 87% of the electronic-related products subject to tariffs come from non-Chinese multinational companies and foreign-invested joint ventures.

For example, most semiconductor products used in China are sourced from the U.S., Taiwan, South Korea, or Japan, with only low-end assembly, packaging, and testing work done in China.

“Some people say that because we buy more from China, we are hitting China harder. They don’t really understand how trade works,” Lovely said.

Among the goods imported from China to the U.S. is lanthanum oxide, used in Toyota’s Prius car batteries and catalysts for oil hydrocracking. This rare earth metal is only imported from China.

In several categories of LED lighting fixtures imported into the U.S., Chinese products account for 99%, totaling over $1.1 billion. Additionally, although ceiling fixture components are classified as intermediate products, they are often sold directly to consumers; last year, Chinese products accounted for 91% of the total imports of this item, amounting to $697 million.