Tracking the E-cigarette Trade

thumbnail_gaoUp to 90% of electronic cigarette devices in the multi-billion-dollar U.S. e-cigarette market are imported, according to expert estimates.

But until recently, the federal government couldn’t determine the volume of e-cigarette imports because they were lumped together for tracking purposes with things like glow sticks and hand-held calorie counters. Starting January 1, 2016, there are new tracking codes for imported e-cigarettes. What does this mean? Today’s WatchBlog explores.

Decoding imports

Every product imported to the United States is assigned a numerical code with up to 10 digits. These statistical reporting numbers can be for a specific product or cover a “basket of goods.” The numbers help the government track and report trade statistics, such as how many of a particular item are being imported or how much tax revenue that imported item is generating.

In the case of a newer product, like e-cigarettes, there may not be an easy fit. The main parts of an e-cigarette include a battery, a heating element, a cartridge or tank for the e-cigarette liquid, and the liquid itself, which typically contains nicotine.

Figure 1: Types of E-cigarettes and E-cigarette Parts(Excerpted from GAO-15-771)

Before January 1, 2016, there were no statistical reporting numbers specific to e-cigarette imports. Instead, e-cigarettes, their parts, and liquid were classified within several baskets of goods that included not only glow sticks and hand-held calorie counters, but also special effects strobe lights, seaweed extracts, and hand sanitizer, among other things. As a result, the federal government was unable to track e-cigarette imports separately.

This issue is not unique to e-cigarettes. As goods come and go, so can statistical reporting numbers. In fact, part of the work of the interagency committee that oversees the numbers is to create new statistical reporting numbers or discontinue unused ones. For example, in the fall of 2014, the committee reviewed a request from an industry group for statistical reporting numbers for plastic ribbons and bows—products that were covered by 17 baskets of goods.

Looking ahead

At its meeting last fall, the committee created several new statistical reporting numbers for “personal electric or electronic vaporizing devices” and the chemical mixtures used in such devices. These new e-cigarette statistical reporting numbers took effect on January 1, 2016. This means that by January 1, 2017, the U.S. government will have its first complete year of new data for imported e-cigarettes sold on the U.S. market.

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