oversight

Electronic Cigarettes: U.S. Imports, 2016-2018

Published by the Government Accountability Office on 2019-08-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

441 G St. N.W.
Washington, DC 20548


July 12, 2019


The Honorable Ron Wyden
Ranking Member
Committee on Finance
United States Senate

Electronic Cigarettes: U.S. Imports, 2016-2018

Dear Senator Wyden:

Over the last 15 years, use of electronic cigarettes, known as e-cigarettes, in the United States
has grown rapidly as use of traditional cigarettes declined among both adolescents and adults.
As we reported previously, most e-cigarettes sold in the United States are thought to be
imported. 1 The U.S. government began collecting data specific to e-cigarette imports in January
2016, after the Committee for Statistical Annotation of Tariff Schedules established six new
statistical reporting numbers for e-cigarette devices, parts, and liquid in the Harmonized Tariff
Schedule of the United States (HTS). 2 In April 2017, we reported, on the basis of the first year of
data, that the customs value of U.S. e-cigarette imports in 2016 was about $342 million and that
91 percent of those imports, by customs value, came from China. 3

You requested that we report on e-cigarettes imported into the United States from 2016 through
2018. This report examines the customs value, tariff revenue, countries of origin, and ports of
entry for e-cigarette devices, parts, and liquid imported during those years. We analyzed the
data that were available in April 2019 from the Interactive Tariff and Trade DataWeb maintained
by the U.S. International Trade Commission (USITC), which incorporates U.S. trade statistics
published by the U.S. Census Bureau (Census). 4 We analyzed import data for the six statistical
reporting numbers that covered e-cigarette devices, parts, and liquid in 2016 through 2018. 5 For

1
    GAO, Electronic Cigarettes: U.S. Imports in 2016, GAO-17-515R (Washington, D.C.: Apr. 24, 2017).
2
 The committee comprises representatives from the U.S. International Trade Commission (USITC), U.S. Customs
and Border Protection (CBP), and the U.S. Census Bureau. All goods imported into the United States are classified
by CBP according to the HTS. The HTS, published and maintained by USITC, provides the legal basis for the
classification of every product that enters the United States and the corresponding tariff rate the importer must pay for
each product. The HTS contains numbered provisions at the 2-, 4-, 6-, 8-, and 10-digit level. The 10-digit provision is
known as a statistical reporting number that can be used for tracking and reporting trade statistics. For more
information about the committee and process for establishing new statistical reporting numbers, see GAO, Electronic
Cigarettes: Imports, Tariffs, and Data Collection, GAO-15-491R (Washington, D.C.: May 7, 2015).
3
 GAO-17-515R. Customs value is defined as the price actually paid or payable for merchandise when sold for
exportation to the United States, excluding U.S. import tariffs (also known as duties), freight, insurance, and other
charges incurred in bringing the merchandise to the United States.
4
    See https://dataweb.usitc.gov/.
5
 All years cited in this report are calendar years (January–December). U.S. import data are collected by CBP from
records submitted by importers. These data are then incorporated into the official trade statistics published by
Census. We used unrevised 2018 trade data. Census revises trade data periodically, and its first official revisions of
2018 trade data became available in June 2019, after we completed our analysis. Throughout this report, our analysis


Page 1                                                                          GAO-19-619R Electronic Cigarettes
each reporting number, we analyzed customs value, tariff revenue, country of origin, and port of
entry. 6 We also analyzed data on import quantities for four e-cigarette reporting numbers—
covering e-cigarette devices and liquid—for which the federal government tracked quantity in
2016 through 2018. 7

To understand trends in the data and assess the data’s reliability, we reviewed agency
documents about U.S. foreign trade statistics and interviewed U.S. Customs and Border
Protection (CBP) and Census officials about how the data were collected, how they were
checked, and any limitations of the data. We determined that the data were sufficiently reliable
for the purposes of presenting annual descriptive statistics.

We conducted this performance audit from April to July 2019 in accordance with generally
accepted government auditing standards. Those standards require that we plan and perform the
audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings
and conclusions based on our audit objectives. We believe that the evidence we obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.

An e-cigarette device typically contains a battery, a heating element, and a cartridge or tank that
may be empty or filled with liquid. Major e-cigarette parts include heating elements and
cartridges, which can be imported separately from devices. E-cigarette liquid—which may
contain nicotine in different concentrations or no nicotine—can also be imported separately from
both devices and cartridges.

As table 1 in the enclosure shows, the six statistical reporting numbers in the HTS for U.S.
e-cigarette imports cover devices with and without nicotine; parts with and without nicotine; and
two types of nicotine-containing e-cigarette liquid: (1) liquid mixtures containing 5 percent or
more by weight of one or more aromatic or modified aromatic substances, including nicotine
(liquid with higher aromatic substance content), and (2) liquid mixtures containing less than 5
percent by weight of one or more aromatic or modified aromatic substances, including nicotine
(liquid with lower aromatic substance content). 8 Devices with and without nicotine are subject to
the same general tariff rate, and parts with and without nicotine are subject to the same general
tariff rate. However, liquid with higher aromatic substance content is subject to a higher general



is based on consumption import data, which measure the total of merchandise that has physically cleared U.S.
customs, either entering consumption channels immediately or entering after withdrawal for consumption from
bonded warehouses or foreign trade zones under CBP custody.
6
 To report tariff revenue, we used the “calculated duty” variable, which represents the estimated import duties
collected. Estimated duties are calculated on the basis of the applicable rate(s) of duty (or tariff) as shown in the HTS.
7
 Tracking of the quantity of imported e-cigarette liquid began in January 2016 and of e-cigarette devices in July 2016.
Tracking of the quantity of imported e-cigarette parts began in January 2019.
8
 These descriptions for the two types of e-cigarette liquid, corresponding to statistical reporting numbers
3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and U.S.
Customs and Border Protection officials and differ from the descriptions presented in our prior related report (GAO-
17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the same
agencies, distinguished between the two statistical reporting numbers on the basis of nicotine content. The two
statistical reporting numbers each cover nicotine-containing formulated liquid mixtures and are distinguished from
each other by the percentage of aromatic or modified aromatic substances, including nicotine, and not by the
percentage of nicotine alone. Formulated liquid mixtures imported under 3824.99.2840 and 3824.99.9280 may also
contain other substances in addition to aromatic and modified aromatic substances. For more information, see table 1
in the enclosure.



Page 2                                                                          GAO-19-619R Electronic Cigarettes
tariff rate (6.5 percent of customs value) than liquid with lower aromatic substance content (5
percent of customs value). 9

In summary, our analysis of U.S. e-cigarette import data for 2016 through 2018 found the
following:

•   Customs value and tariff revenue for all U.S. e-cigarette imports. The customs value of
    e-cigarette devices, parts, and liquid imported into the United States from 2016 through
    2018 was $2.4 billion (see table 2 in the enclosure). Devices and parts each accounted for
    about $1.2 billion of total customs value (48 percent for each, or 96 percent for both) and
    liquid accounted for $101.5 million (4 percent). The federal government collected $120
    million in total tariff revenue from these imports during this period.

•   Changes in customs value, tariff revenue, and quantities of U.S. e-cigarette imports
    from 2016 to 2018. The customs value of all U.S. e-cigarette imports increased by 300
    percent from 2016 to 2018 (see table 3 in the enclosure). The customs value of five of the
    six imported e-cigarette products—devices with and without nicotine, parts with and without
    nicotine, and liquid with lower aromatic substance content—increased from the 2016 level to
    the 2018 level. Tariff revenue from these products also increased (see table 4 in the
    enclosure). In addition, quantities of imported devices with and without nicotine and of liquid
    with lower aromatic substance content increased (see table 5 in the enclosure). Only
    imported e-cigarette liquid with higher aromatic substance content decreased in customs
    value, tariff revenue, and quantity from the 2016 level to the 2018 level.

    As figure 1 and table 3 in the enclosure show, the highest increases in customs value from
    the 2016 level to the 2018 level were associated with imported parts without nicotine (684
    percent), liquid with lower aromatic substance content (582 percent), and parts with nicotine
    (322 percent). In addition, the customs value of imported devices without nicotine increased
    by 231 percent during this period. By comparison, the customs value of imported liquid with
    higher aromatic substance content decreased by 28 percent from 2016 to 2018.




9
 General tariff rates are applied to imported goods from countries with which the United States has normal trade
relations.



Page 3                                                                       GAO-19-619R Electronic Cigarettes
Figure 1: Customs Value of E-cigarette Devices, Parts, and Liquid Imported into the United States, 2016-2018




Notes: See table 3 in GAO-19-619R for a more detailed presentation of the data for these imports.
The descriptions for the two types of nicotine-containing e-cigarette liquid, corresponding to statistical reporting
numbers 3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and
U.S. Customs and Border Protection officials and differ from the descriptions presented in our prior related report
(GAO-17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the
same agencies, distinguished between the two statistical reporting numbers on the basis of the percentage of
nicotine content. The two statistical reporting numbers each cover nicotine-containing formulated liquid mixtures; are
distinguished from each other by the percentage of aromatic or modified aromatic substances, including nicotine; and
may also contain other substances.


•   U.S. e-cigarette imports by country. The customs value of e-cigarette imports from China
    accounted for 97 percent of the customs value of all e-cigarette imports from 65 countries
    from 2016 through 2018 (see table 6 in the enclosure). Imports from China accounted for
    almost 100 percent of the customs value of all devices with nicotine and 95 percent of the
    customs value of all devices without nicotine (see table 7 in the enclosure) and for about 99
    percent of the customs value of all parts with and without nicotine (see table 8 in the
    enclosure). Devices and parts without nicotine were imported from a larger number of
    countries than devices and parts with nicotine. In contrast to devices and parts, e-cigarette
    liquid imported from China represented a smaller percentage of the customs value of the
    two types of imported e-cigarette liquid: 90 percent for liquid with higher aromatic substance
    content and 69 percent for liquid with lower aromatic substance content (see table 9 in the
    enclosure).

    Our analysis of quantities of e-cigarette devices and liquid imported from 2016 through 2018
    shows similar patterns. From July 2016 through December 2018, e-cigarette importers
    brought 271 million e-cigarette devices with and without nicotine into the United States.
    Almost all imported devices with and without nicotine, or just under 100 percent by quantity,
    came from China (see table 10 in the enclosure). From January 2016 through December



Page 4                                                                          GAO-19-619R Electronic Cigarettes
     2018, e-cigarette importers brought 2 million kilograms of nicotine-containing e-cigarette
     liquid into the United States. Liquid with higher aromatic substance content imported from
     China accounted for 55 percent of all such imported liquid by quantity, and liquid with lower
     aromatic substance content imported from China accounted for 45 percent (see table 11 in
     the enclosure).

•    Ports of entry. The top five ports of entry—Los Angeles, Cleveland, Chicago, Savannah,
     and Norfolk—accounted for 81 percent of the customs value of U.S. e-cigarette imports in
     2016 through 2018 (see table 12 in the enclosure). 10 Notably, the value of e-cigarette
     imports that cleared customs at the Chicago port of entry increased 80-fold, from about $6
     million in 2016 to $468 million in 2018.

More detailed information about the six statistical reporting numbers for U.S. e-cigarette imports
and about the results of our analysis is presented in the enclosure.

We provided a draft of this report to USITC, CBP, and Census. We received technical
comments from USITC, CBP, and Census and incorporated the comments as appropriate.

                                                      -----

As agreed with your office, unless you publicly announce the contents of this report earlier, we
plan no further distribution until 30 days from the report date. At that time, we will send copies to
appropriate congressional committees, to the Chairman of the U.S. International Trade
Commission, the Commissioner of U.S. Customs and Border Protection, and the Director of the
U.S. Census Bureau. In addition, the report will be available at no charge on the GAO website
at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-3149 or
gootnickd@gao.gov. Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff who made key contributions to
this report are Emil Friberg (Assistant Director), Sada Aksartova, Reid Lowe, and Grace Lui.

Sincerely yours,




David Gootnick
Director, International Affairs and Trade




Enclosure – 1

10
 The port of entry is the location where imported goods clear U.S. customs and may differ from the port of unlading,
where goods are unloaded from the importing vessel or aircraft.



Page 5                                                                       GAO-19-619R Electronic Cigarettes
Enclosure

Table 1: HTS Classification Summary for U.S. E-cigarette Imports, January 2016–June 2019

                                                                                                                            Date when
 E-cigarette product and statistical              General tariff rate                                   Unit of             tracking of
 reporting number                                 (percentage of customs value)                         quantity            quantity began
                 a
 Devices
 Devices with nicotine                            2.6 percent
                 b
  8543.70.9930                                    [+25 percent additional tariff rate since             Number              July 2016
 Devices without nicotine                         August 23, 2018, for products from
                b                                       c
  8543.70.9940                                    China ]
         a
 Parts
 Parts with nicotine                              2.6 percent (Jan. 2016–June 2016)
                  d
  8543.90.8850                                    1.9 percent (July 2016–June 2017)
                                                  1.3 percent (July 2017–June 2018)
                                                                                        e
                                                  0.6 percent (July 2018–June 2019)
                                                                                                        Number              January 2019
 Parts without nicotine                           [+10 percent additional tariff rate since
                 d
  8543.90.8860                                    September 24, 2018, for products from
                                                  China that increased to 25 percent on
                                                                c
                                                  May 10, 2019 ]
             f
 Liquid
 Liquid mixtures containing 5 percent
 or more by weight of one or more                 6.5 percent
 aromatic or modified aromatic                    [+10 percent additional tariff rate since
 substances, including nicotine (liquid           September 24, 2018, for products from
 with higher aromatic substance                   China that increased to 25 percent on
                                                                c
 content)                                         May 10, 2019 ]
                 g
   3824.99.2840
                                                                                                        Kilogram            January 2016
 Liquid mixtures containing less than 5
 percent by weight of one or more                 5 percent
 aromatic or modified aromatic                    [+10 percent additional tariff rate since
 substances, including nicotine (liquid           September 24, 2018, for products from
 with lower aromatic substance                    China that increased to 25 percent on
 content)                                         May 10, 2019 ]
                                                                c
                 g
   3824.99.9280
Source: GAO presentation of information from the Harmonized Tariff Schedule of the United States (HTS) and U.S. International
Trade Commission. │ GAO-19-619R
Notes: General tariff rates are applied to imported goods from countries with which the United States has normal
trade relations. The HTS also enumerates tariff rates for goods from some of these countries that qualify for
preferential tariff rates under a variety of special trade agreements as well as rates for a specific list of countries. The
HTS additionally lists special tariff rates for products that fit technical specifications enumerated in notes to the HTS.
See the HTS for these other rates.
Customs value is defined as the price actually paid or payable for merchandise when sold for exportation to the
United States, excluding U.S. import tariffs (also known as duties), freight, insurance, and other charges incurred in
bringing the merchandise to the United States.
a
  According to the HTS (chapter 85, statistical note 7), for the purposes of statistical reporting numbers 8543.70.9930,
8543.70.9940, 8543.90.8850, and 8543.90.8860, personal electric or electronic vaporizing devices are devices that
electrically heat or atomize liquids or other substances, whether or not containing nicotine, producing a vapor to be
inhaled through the mouthpiece.
b
  Statistical reporting numbers 8543.70.9930 and 8543.70.9940 replaced 8543.70.9630 and 8543.70.9640,
respectively, on July 1, 2016. These reporting numbers cover closed-system and open-system e-cigarettes if they are
imported as functional devices with or without cartridges.
c
  The additional tariffs were imposed by the U.S. Trade Representative (USTR) in accordance with the direction of the
President. On August 18, 2017, following a Memorandum from the President, USTR initiated an investigation under
Section 301 of the Trade Act of 1974 into the government of China’s acts, policies, and practices related to
technology transfer, intellectual property, and innovation. 82 Fed. Reg. 40,213 (Aug. 24, 2017). As a result of the
investigation and at the direction of the President, USTR imposed tariffs on a range of products from China in three



Page 6                                                                                           GAO-19-619R Electronic Cigarettes
separate actions in 2018. See, 83 Fed. Reg. 28,710 (June 20, 2018); 83 Fed. Reg. 40,823 (Aug. 16, 2018); and 83
Fed. Reg. 47,974 (Sept. 21, 2018). Additionally, effective May 10, 2019, USTR increased the tariff rate imposed on
products covered by its third action from 10 percent to 25 percent. The additional tariffs are effective until suspended
or terminated.
d
  Statistical reporting numbers 8543.90.8850 and 8543.90.8860 cover major parts, such as heating elements and
cartridges containing heating elements, that are imported separately from e-cigarette devices. Smaller e-cigarette
components—such as microprocessors, batteries, tubes containing batteries, or light-emitting diode lights—that may
be used for other products in addition to e-cigarettes are classified under other applicable HTS provisions.
e
  The general tariff rate of 0.6 percent was reduced to zero on July 1, 2019.
f
  According to the HTS (chapter 38, statistical note 3), for the purposes of statistical reporting numbers 3824.99.2840
and 3824.99.9280, “mixtures for use in personal electric or electronic vaporizing devices” means a formulated liquid
containing nicotine, whether or not packaged for retail sale in cartridges or tanks adaptable to such devices.
g
  In this report, the descriptions of the two types of e-cigarette liquid, corresponding to statistical reporting numbers
3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and U.S.
Customs and Border Protection officials and differs from the descriptions presented in our prior related report (GAO-
17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the same
agencies, distinguished between the two reporting numbers on the basis of nicotine content. The two statistical
reporting numbers each cover nicotine-containing formulated liquid mixtures and are distinguished from each other by
the percentage of aromatic or modified aromatic substances, including nicotine, and not by the percentage of nicotine
alone. Formulated liquid mixtures imported under 3824.99.2840 and 3824.99.9280 may also contain other
substances—such as, for example, glycol or glycerin—in addition to aromatic and modified aromatic substances.
Statistical reporting numbers 3824.99.2840 and 3824.99.9280 replaced 3824.90.2840 and 3824.90.9280,
respectively, on January 1, 2017.




Page 7                                                                         GAO-19-619R Electronic Cigarettes
Table 2: Total Customs Value and Tariff Revenue for U.S. E-cigarette Imports, 2016-2018

                                                                                         Customs value                      Tariff revenue
    E-cigarette product                                                                       in dollars                         in dollars
    Devices
    Devices with nicotine                                                                     192,997,202                       14,513,280
    Devices without nicotine                                                                  971,789,973                       56,949,466
    Subtotal for devices                                                                   1,164,787,175                        71,462,746
    Parts
    Parts with nicotine                                                                       201,284,194                         6,118,656
    Parts without nicotine                                                                    949,522,430                       35,508,317
    Subtotal for parts                                                                     1,150,806,624                        41,626,973
             a
    Liquid
    Liquid with higher aromatic substance content                                              71,942,536                         4,825,617
    Liquid with lower aromatic substance content                                               29,572,706                         2,541,831
    Subtotal for liquid                                                                       101,515,242                         7,367,448

    Total                                                                                  2,417,109,041                       120,457,167
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
a
 The descriptions for the two types of nicotine-containing e-cigarette liquid, corresponding to statistical reporting
numbers 3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and
U.S. Customs and Border Protection officials and differ from the descriptions presented in our prior related report
(GAO-17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the
same agencies, distinguished between the two statistical reporting numbers on the basis of the percentage of
nicotine content. The two statistical reporting numbers each cover nicotine-containing formulated liquid mixtures; are
distinguished from each other by the percentage of aromatic or modified aromatic substances, including nicotine; and
may also contain other substances.




Page 8                                                                                        GAO-19-619R Electronic Cigarettes
Table 3: Customs Value of U.S. E-cigarette Imports, by Product and Year, 2016-2018

                                                                             Customs value in dollars                           Percentage
    E-cigarette                                                                                                                    change,
    product                                                                 2016                2017                 2018        2016–2018
    Devices
    Devices with nicotine                                           53,946,173           62,053,635          76,997,394                     43
    Devices without nicotine                                      150,155,638          324,592,277          497,042,058                   231
    Subtotal for devices                                          204,101,811          386,645,912          574,039,452                   181
    Parts
    Parts with nicotine                                             26,996,229           60,462,520         113,825,445                   322
    Parts without nicotine                                          81,745,233         227,116,550          640,660,647                   684
    Subtotal for parts                                            108,741,462          287,579,070          754,486,092                   594
             a
    Liquid
    Liquid with higher aromatic substance content                   26,675,683           26,088,221          19,178,632                    -28
    Liquid with lower aromatic substance content                     3,412,746            2,871,712          23,288,248                   582
    Subtotal for liquid                                             30,088,429           28,959,933          42,466,880                     41

    Total                                                         342,931,702          703,184,915        1,370,992,424                   300
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb, (accessed
Apr. 29, 2019). │ GAO-19-619R
a
 The descriptions for the two types of nicotine-containing e-cigarette liquid, corresponding to statistical reporting
numbers 3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and
U.S. Customs and Border Protection officials and differ from the descriptions presented in our prior related report
(GAO-17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the
same agencies, distinguished between the two statistical reporting numbers on the basis of the percentage of
nicotine content. The two statistical reporting numbers each cover nicotine-containing formulated liquid mixtures; are
distinguished from each other by the percentage of aromatic or modified aromatic substances, including nicotine; and
may also contain other substances.




Page 9                                                                                         GAO-19-619R Electronic Cigarettes
Table 4: Tariff Revenue from U.S. E-cigarette Imports, by Product and Year, 2016-2018

                                                                             Tariff revenue in dollars                         Percentage
                                                                                                                                  change,
    E-cigarette product                                                    2016                 2017                 2018       2016–2018
    Devices
    Devices with nicotine                                            1,402,525            1,613,409          11,497,346                   720
    Devices without nicotine                                         3,423,424            8,150,814          45,375,228                1,225
    Subtotal for devices                                             4,825,949            9,764,223          56,872,574                1,078
    Parts
    Parts with nicotine                                                602,086              919,833            4,596,737                  663
    Parts without nicotine                                           1,638,998            3,528,174          30,341,145                1,751
    Subtotal for parts                                               2,241,084            4,448,007          34,937,882                1,459
             a
    Liquid
    Liquid with higher aromatic substance content                    1,693,349            1,671,372            1,460,896                  -14
    Liquid with lower aromatic substance content                       159,221              134,535            2,248,075               1,312
    Subtotal for liquid                                              1,852,570            1,805,907            3,708,971                  100

    Total                                                            8,919,603          16,018,137           95,519,427                   971
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
a
 The descriptions for the two types of nicotine-containing e-cigarette liquid, corresponding to statistical reporting
numbers 3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and
U.S. Customs and Border Protection officials and differ from the descriptions presented in our prior related report
(GAO-17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the
same agencies, distinguished between the two statistical reporting numbers on the basis of the percentage of
nicotine content. The two statistical reporting numbers each cover nicotine-containing formulated liquid mixtures; are
distinguished from each other by the percentage of aromatic or modified aromatic substances, including nicotine; and
may also contain other substances.




Page 10                                                                                       GAO-19-619R Electronic Cigarettes
Table 5: Quantities of Imported E-cigarette Devices and Liquid, by Product and Year, 2016-2018

                                                                                                                               Percentage
                                                                                                                                  change,
 E-cigarette product                                                       2016                 2017                 2018       2016–2018
 Devices (July 2016–Dec. 2018)                                                          Number
 Devices with nicotine                                               5,629,456          30,222,777           30,601,891                   444
 Devices without nicotine                                            5,310,938          91,265,598          108,301,027                1,939
 Total for devices                                                  10,940,394         121,488,375          138,902,918                1,170
                                      a
 Liquid (Jan. 2016–Dec. 2018)                                                         Kilograms
 Liquid with higher aromatic substance content                         486,313              399,744              407,864                  -16
 Liquid with lower aromatic substance content                          123,608              157,044              462,214                  274
 Total for liquid                                                      609,921              556,788              870,078                   43
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
Notes: Tracking of the quantity of imported e-cigarette liquid began in January 2016 and of e-cigarette devices in July
2016. Tracking of the quantity of imported e-cigarette parts began in January 2019.
a
  The descriptions for the two types of nicotine-containing e-cigarette liquid, corresponding to statistical reporting
numbers 3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and
U.S. Customs and Border Protection officials and differ from the descriptions presented in our prior related report
(GAO-17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the
same agencies, distinguished between the two statistical reporting numbers on the basis of the percentage of
nicotine content. The two statistical reporting numbers each cover nicotine-containing formulated liquid mixtures; are
distinguished from each other by the percentage of aromatic or modified aromatic substances, including nicotine; and
may also contain other substances.




Page 11                                                                                       GAO-19-619R Electronic Cigarettes
Table 6: Customs Value of U.S. E-cigarette Imports, by Country of Origin and Year, 2016-2018

    65 countries, customs value in dollars
    Country                                       2016                   2017                2018                   Total      Percentage
    China                                313,521,695           680,648,542        1,352,922,732          2,347,092,969                   97.1
    Canada                                 11,573,095            11,275,241            3,388,247            26,236,583                    1.1
    Mexico                                  9,423,067             1,649,546            1,509,108            12,581,721                    0.5
    Germany                                 1,998,540             2,990,635            2,971,204              7,960,379                   0.3
    United Kingdom                          1,635,250             1,852,016            2,504,044              5,991,310                   0.2
    Italy                                      318,437               167,385           1,492,978              1,978,800                   0.1
    France                                     656,008                92,681           1,080,753              1,829,442                   0.1
    Malaysia                                    51,317               605,196           1,048,329              1,704,842                   0.1
    Israel                                     856,402               348,484             254,742              1,459,628                   0.1
    Czech Republic                                2,400              738,486             550,685              1,291,571                   0.1
    Austria                                    620,404               548,841               55,538             1,224,783                   0.1
    Switzerland                                392,636               291,780             423,578              1,107,994                   0.0
    South Korea                                225,664               408,383             435,626              1,069,673                   0.0
    Singapore                                   47,694               125,677             769,258                942,629                   0.0
    Poland                                     137,664               318,502             398,338                854,504                   0.0
    Japan                                      587,374               115,097             128,031                830,502                   0.0
              a
    Taiwan                                     146,639               124,253             201,957                472,849                   0.0
    New Zealand                                 32,823               105,831             159,366                298,020                   0.0
    India                                       86,472               123,765               77,825               288,062                   0.0
    Malta                                               -                     -          201,250                201,250                   0.0
    Vietnam                                     14,960               173,880                 4,924              193,764                   0.0
    Denmark                                    133,761                11,250               12,145               157,156                   0.0
    Hungary                                     48,728               102,010                 2,906              153,644                   0.0
    Panama                                     109,968                  8,029                      -            117,997                   0.0
    Netherlands                                 82,164                21,769                 7,415              111,348                   0.0
    Other (40 countries)                       228,540               337,636             391,445                957,621                   0.0

    Total                                342,931,702           703,184,915        1,370,992,424          2,417,109,041                 100.0
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
a
 Although the United States does not have diplomatic relations with Taiwan, we have listed it as a separate country
because whenever the laws of the United States refer or relate to foreign countries, nations, states, governments, or
similar entities, such terms shall include and shall apply to Taiwan. Taiwan Relations Act, Pub. L. No. 96-8, § 4(b)(1),
93 Stat. 14 (1979). Furthermore, the data we used list Taiwan as a country and show imports from Taiwan
separately.




Page 12                                                                                       GAO-19-619R Electronic Cigarettes
Table 7: Customs Value of E-cigarette Devices Imported into the United States, by Country of Origin and
Year, 2016-2018

 In dollars
 Country                                         2016                    2017                2018                   Total      Percentage
 Devices with nicotine
 China                                   53,779,326              61,841,443           76,828,711           192,449,480                   99.7
 Austria                                       54,680                107,273                       -             161,953                  0.1
 Japan                                          4,763                 85,545               36,797                127,105                  0.1
 Singapore                                            -                       -          120,000                 120,000                  0.1
 United Kingdom                                30,412                   5,135                      -              35,547                  0.0
 Netherlands                                   32,239                         -                    -              32,239                  0.0
 Germany                                       16,650                         -              9,873                26,523                  0.0
 Australia                                     12,951                         -                    -              12,951                  0.0
 Taiwan                                         8,712                         -                    -                8,712                 0.0
 Poland                                               -                 6,542                      -                6,542                 0.0
 Other (5 countries)                            6,440                   7,697                2,013                16,150                  0.0
 Subtotal                                53,946,173              62,053,635           76,997,394           192,997,202                 100.0
 Devices without nicotine
 China                                  125,801,030            308,481,870          490,251,421            924,534,321                   95.1
 Canada                                  11,213,774              10,676,729              315,967             22,206,470                   2.3
 Mexico                                    9,390,998              1,578,933            1,484,036             12,453,967                   1.3
 Germany                                   1,611,568              2,509,892            2,616,927               6,738,387                  0.7
 United Kingdom                              618,628                 136,885             484,797               1,240,310                  0.1
 France                                      175,887                  37,046             882,474               1,095,407                  0.1
 South Korea                                 171,555                 295,911             155,584                 623,050                  0.1
 Switzerland                                 103,704                 153,322             182,933                 439,959                  0.0
 Austria                                     135,656                 182,000                 9,576               327,232                  0.0
 Israel                                      245,872                  30,000               41,700                317,572                  0.0
 Other (42 countries)                        686,966                 509,689             616,643               1,813,298                  0.2
 Subtotal                               150,155,638            324,592,277          497,042,058            971,789,973                 100.0

 Total                                  204,101,811            386,645,912          574,039,452          1,164,787,175
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R




Page 13                                                                                       GAO-19-619R Electronic Cigarettes
Table 8: Customs Value of E-cigarette Parts Imported into the United States, by Country of Origin and Year,
2016-2018

    In dollars
    Country                                      2016                    2017                2018                   Total      Percentage
    Parts with nicotine
    China                                26,851,401              60,316,602         113,749,046            200,917,049                   99.8
    Italy                                       7,048                 74,015                       -              81,063                  0.0
    Austria                                    25,142                 37,500                       -              62,642                  0.0
    United Kingdom                              8,696                         -            46,441                 55,137                  0.0
    Mexico                                            -               24,003                       -              24,003                  0.0
    Netherlands                                22,635                         -                    -              22,635                  0.0
    Denmark                                    21,258                         -                    -              21,258                  0.0
    South Korea                                21,000                         -                    -              21,000                  0.0
    Canada                                     16,345                         -              4,505                20,850                  0.0
    Japan                                             -                       -            16,008                 16,008                  0.0
    Other (5 countries)                        22,704                 10,400                 9,445                42,549                  0.0
    Subtotal                             26,996,229              60,462,520         113,825,445            201,284,194                 100.0
    Parts without nicotine
    China                                80,420,948            225,072,922          638,782,709            944,276,579                   99.4
    Germany                                  173,569                 352,187             300,619                826,375                   0.1
    Israel                                   157,729                 318,484             213,042                689,255                   0.1
    Switzerland                              182,552                 132,239             229,347                544,138                   0.1
    United Kingdom                           123,884                 136,548             121,457                381,889                   0.0
    Singapore                                   7,103                112,722             230,928                350,753                   0.0
    Malaysia                                   51,317                 90,380             149,223                290,920                   0.0
              a
    Taiwan                                     67,111                108,357             110,959                286,427                   0.0
    Austria                                  190,522                  58,163               23,276               271,961                   0.0
    Canada                                   102,867                 113,683               53,160               269,710                   0.0
    Other (27 countries)                     267,631                 620,865             445,927              1,334,423                   0.1
    Subtotal                             81,745,233            227,116,550          640,660,647            949,522,430                 100.0

    Total                               108,741,462            287,579,070          754,486,092          1,150,806,624
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
a
 Although the United States does not have diplomatic relations with Taiwan, we have listed it as a separate country
because whenever the laws of the United States refer or relate to foreign countries, nations, states, governments, or
similar entities, such terms shall include and shall apply to Taiwan. Taiwan Relations Act, Pub. L. No. 96-8, § 4(b)(1),
93 Stat. 14 (1979). Furthermore, the data we used list Taiwan as a country and show imports from Taiwan
separately.




Page 14                                                                                       GAO-19-619R Electronic Cigarettes
Table 9: Customs Value of E-cigarette Liquid Imported into the United States, by Country of Origin and Year,
2016-2018

 In dollars
 Country                                         2016                    2017                2018                   Total      Percentage
 Liquid with higher aromatic substance content
 China                                   24,728,648              23,730,184           16,032,933             64,491,765                  89.6
 United Kingdom                              743,995                 754,607             543,922               2,042,524                  2.8
 Czech Republic                                       -              738,486             492,570               1,231,056                  1.7
 Malaysia                                             -              172,571             765,933                 938,504                  1.3
 Canada                                      138,512                 368,411             321,853                 828,776                  1.2
 Israel                                      452,801                          -                    -             452,801                  0.6
 Singapore                                            -                       -          401,730                 401,730                  0.6
 France                                      153,153                          -          182,853                 336,006                  0.5
 Austria                                       99,831                163,905               22,686                286,422                  0.4
 Malta                                                -                       -          201,250                 201,250                  0.3
 Other (15 countries)                        358,743                 160,057             212,902                 731,702                  1.0
 Subtotal                                26,675,683              26,088,221           19,178,632             71,942,536                100.0
 Liquid with lower aromatic substance content
 China                                     1,940,342              1,205,521           17,277,912             20,423,775                  69.1
 Canada                                      101,597                 116,418           2,690,749               2,908,764                  9.8
 United Kingdom                              109,635                 818,841           1,307,427               2,235,903                  7.6
 Italy                                       172,071                  11,349           1,414,563               1,597,983                  5.4
 Malaysia                                             -              278,644             121,489                 400,133                  1.4
 Poland                                        56,936                 84,414             222,952                 364,302                  1.2
 Germany                                     190,513                 100,960               32,519                323,992                  1.1
 France                                      242,799                    5,402              13,425                261,626                  0.9
 Japan                                       216,671                    3,057                      -             219,728                  0.7
 South Korea                                          -               90,002             101,790                 191,792                  0.6
 Other (17 countries)                        382,182                 157,104             105,422                 644,708                  2.2
 Subtotal                                  3,412,746              2,871,712           23,288,248             29,572,706                100.0

 Total                                   30,088,429              28,959,933           42,466,880            101,515,242
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
Note: The descriptions for the two types of nicotine-containing e-cigarette liquid, corresponding to statistical reporting
numbers 3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and
U.S. Customs and Border Protection officials and differ from the descriptions presented in our prior related report
(GAO-17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the
same agencies, distinguished between the two statistical reporting numbers on the basis of the percentage of
nicotine content. The two statistical reporting numbers each cover nicotine-containing formulated liquid mixtures; are
distinguished from each other by the percentage of aromatic or modified aromatic substances, including nicotine; and
may also contain other substances.




Page 15                                                                                       GAO-19-619R Electronic Cigarettes
Table 10: Quantities of E-cigarette Devices Imported into the United States, by Country of Origin and Year,
2016-2018

 Number of devices
                                               2016
 Country                                 (July-Dec.)                     2017                2018                   Total      Percentage
 Devices with nicotine
 China                                     5,624,706             30,000,323           30,482,228             66,107,257                  99.5
 Japan                                             100               213,600               79,263                292,963                  0.4
 Singapore                                            -                       -            40,000                 40,000                  0.1
 Austria                                        3,822                   8,132                      -              11,954                  0.0
 United Kingdom                                       -                   545                      -                  545                 0.0
 Germany                                           320                        -                100                    420                 0.0
 Canada                                               -                       -                300                    300                 0.0
 Australia                                         249                        -                    -                  249                 0.0
 France                                            154                        -                    -                  154                 0.0
 Poland                                               -                   101                      -                  101                 0.0
 Other (4 countries)                               105                      76                     -                  181                 0.0
 Subtotal                                  5,629,456             30,222,777           30,601,891             66,454,124                100.0
 Devices without nicotine
 China                                     4,848,766             89,758,820         107,597,974            202,205,560                   98.7
 Canada                                      313,710                 927,250                 4,108             1,245,068                  0.6
 Germany                                       36,641                243,884             225,129                 505,654                  0.2
 Mexico                                        85,331                169,200             167,886                 422,417                  0.2
 Taiwan                                         1,146                   1,718            106,884                 109,748                  0.1
 France                                             43                  2,162              79,736                 81,941                  0.0
 Hungary                                           233                72,700                       -              72,933                  0.0
 United Kingdom                                 8,433                 17,218               45,038                 70,689                  0.0
 Switzerland                                       788                  9,511              32,786                 43,085                  0.0
 Austria                                        4,414                 16,256                      5               20,675                  0.0
 Other (35 countries)                          11,433                 46,879               41,481                 99,793                  0.0
 Subtotal                                  5,310,938             91,265,598         108,301,027            204,877,563                 100.0

 Total                                   10,940,394            121,488,375          138,902,918            271,331,687
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
Note: Tracking of the quantity of imported e-cigarette devices began on July 1, 2016.




Page 16                                                                                       GAO-19-619R Electronic Cigarettes
Table 11: Quantities of E-cigarette Liquid Imported into the United States, by Country of Origin and Year,
2016-2018

 Quantity of liquid in kilograms
 Country                                         2016                    2017                2018                  Total       Percentage
 Liquid with higher aromatic substance content
 China                                       261,435                 279,386             174,998               715,819                   55.3
 Malaysia                                             -               15,126             105,411               120,537                    9.3
 Canada                                        38,118                 51,475               14,900              104,493                    8.1
 United Kingdom                                32,778                 29,427               34,449                96,654                   7.5
 Israel                                        92,880                          -                    -            92,880                   7.2
 France                                        36,188                          -           39,491                75,679                   5.8
 Czech Republic                                       -               20,344               14,953                35,297                   2.7
 Japan                                         20,200                          -                    -            20,200                   1.6
 Singapore                                            -                        -           12,738                12,738                   1.0
 Malta                                                -                        -             5,665                 5,665                  0.4
 Other (15 countries)                           4,714                   3,986                5,259               13,959                   1.1
 Subtotal                                    486,313                 399,744             407,864             1,293,921                 100.0
 Liquid with lower aromatic substance content
 China                                         67,435               47,070             215,805                 330,310                   44.5
 Canada                                        22,229               45,822             101,836                 169,887                   22.9
 United Kingdom                                 2,586               32,120              69,914                 104,620                   14.1
 Italy                                          6,403                  115              40,280                   46,798                   6.3
 Malaysia                                             -             24,354                6,186                  30,540                   4.1
 Poland                                         3,208                  308              24,393                   27,909                   3.8
 Germany                                        6,384                4,231                1,140                  11,755                   1.6
 Panama                                         4,371                      -                    -                  4,371                  0.6
 France                                         3,049                     1                   33                   3,083                  0.4
 Austria                                        2,788                      -                    -                  2,788                  0.4
 Other (18 countries)                           5,155                3,023                2,627                  10,805                   1.5
 Subtotal                                    123,608              157,044              462,214                 742,866                 100.0

 Total                                       609,921              556,788              870,078               2,036,787
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
Note: The descriptions for the two types of nicotine-containing e-cigarette liquid, corresponding to statistical reporting
numbers 3824.99.2840 and 3824.99.9280, reflect recent discussions with U.S. International Trade Commission and
U.S. Customs and Border Protection officials and differ from the descriptions presented in our prior related report
(GAO-17-515R). In that report, the descriptions for e-cigarette liquid, developed in consultation with officials from the
same agencies, distinguished between the two statistical reporting numbers on the basis of the percentage of
nicotine content. The two statistical reporting numbers each cover nicotine-containing formulated liquid mixtures; are
distinguished from each other by the percentage of aromatic or modified aromatic substances, including nicotine; and
may also contain other substances.




Page 17                                                                                       GAO-19-619R Electronic Cigarettes
Table 12: Customs Value of U.S. E-cigarette Imports, by Port of Entry and Year, 2016-2018

 36 ports of entry, customs value in dollars
 Port of entry                                   2016                 2017                 2018                    Total       Percentage
 Los Angeles, CA                         79,171,965          178,761,131         306,788,945              564,722,041                    23.4
 Cleveland, OH                           84,092,569          214,004,915         252,378,553              550,476,037                    22.8
 Chicago, IL                               5,820,868          52,950,725         467,881,234              526,652,827                    21.8
 Savannah, GA                            48,324,446           45,613,837           72,523,855             166,462,138                     6.9
 Norfolk, VA                             33,524,990           63,303,574           59,790,878             156,619,442                     6.5
 Seattle, WA                             32,532,897           39,625,364           39,303,053             111,461,314                     4.6
 San Francisco, CA                         5,906,883          22,656,333           48,134,246               76,697,462                    3.2
 Miami, FL                               11,223,418           22,246,446           12,764,027               46,233,891                    1.9
 New Orleans, LA                           3,114,444          14,001,187           26,028,167               43,143,798                    1.8
 New York, NY                              5,235,341            7,056,619          18,485,298               30,777,258                    1.3
 Anchorage, AK                               439,289            3,607,200          21,843,253               25,889,742                    1.1
 Detroit, MI                             10,164,086           10,759,924            2,101,735               23,025,745                    1.0
 Charlotte, NC                             6,465,758            7,977,892           2,980,260               17,423,910                    0.7
 Tampa, FL                                   618,252            2,679,239           9,473,451               12,770,942                    0.5
 Dallas-Fort Worth, TX                       835,266            5,314,062           4,606,733               10,756,061                    0.4
 Charleston, SC                              156,941            2,666,136           5,601,859                8,424,936                    0.3
 Washington, DC                                31,565               63,210          8,153,177                8,247,952                    0.3
 Buffalo, NY                               1,382,033            1,567,954           4,102,601                7,052,588                    0.3
 Laredo, TX                                6,661,991                47,848                      -            6,709,839                    0.3
 Boston, MA                                  995,126            1,868,237           1,212,431                4,075,794                    0.2
 San Diego, CA                               870,626            1,296,155           1,426,746                3,593,527                    0.1
 Great Falls, MT                             598,996            1,331,986           1,144,239                3,075,221                    0.1
 Nogales, AZ                               1,688,568              150,670              985,896               2,825,134                    0.1
 Houston-Galveston, TX                       144,425            1,745,494              931,110               2,821,029                    0.1
 St. Louis, MO                               352,094            1,165,900              813,923               2,331,917                    0.1
 Other (11 ports of entry)                 2,578,865              722,877           1,536,754                4,838,496                    0.2

 Total                                  342,931,702          703,184,915       1,370,992,424            2,417,109,041                  100.0
Source: GAO analysis of U.S. Census Bureau data retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed
Apr. 29, 2019). │ GAO-19-619R
Note: The port of entry is the location where imported goods clear U.S. customs and may differ from the port of
unlading, where goods are unloaded from the importing vessel or aircraft.




(103471)




Page 18                                                                                       GAO-19-619R Electronic Cigarettes
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