PRESS RELEASE: Regulate Smarter Files Comments Urging USTR to Address Illicit Chinese Vape Crisis

Coalition outlines four specific recommendations to help eliminate the illicit tobacco and nicotine product market as part of the broader effort to combat unfair foreign trade practices and protect American manufacturers, workers, and consumers

WASHINGTON, D.C. –  In public comments submitted to the United States Trade Representative (USTR), the Coalition for Smarter Regulation of Nicotine (Regulate Smarter) outlined four specific recommendations to account for the multi-billion-dollar illicit flavored vapor market built, supplied, and sustained by Chinese illicit manufacturers since 2020.

The letter is available here.

Estimated to represent as much as 85% of the $12.1 to $14.5 billion U.S. e-

vapor market, the illicit market diverts substantial sales volume from legitimate manufacturers, distributors, and retailers operating within the United States. Beyond the direct competitive harms, the illicit electronic nicotine delivery system (ENDS) product market creates broader market distortion, undermining tariff and state excise tax bases and represents a major threat to public health and national security.

“The negative impact of this illicit Chinese vape market in the U.S. is hard to overstate—millions of American consumers using products that lack even the most rudimentary FDA oversight on safety, billions of dollars diverted from lawful

businesses like the ones we represent, tariff evasion, more crime, greater law enforcement burdens, and lost tax revenues,” writes former U.S. Senator Richard Burr (R-NC), chairman of Regulate Smarter.  “Regulate Smarter encourages USTR to seize the opportunity presented by the current Section 301 investigations to eliminate the illicit tobacco and nicotine product market and trade as part of the broader effort to combat unfair foreign trade practices and protect American manufacturers, workers, and consumers.”

In its comments, Regulate Smarter outlines four specific recommendations to combat the illicit market for e-vapor products in the United States, representing a challenge that harms legitimate American businesses, workers, and consumers.

1. USTR should recognize that illicit trade in tobacco and nicotine products is an unfair trade practice consistent with the broader patterns of market-distorting behavior under investigation.

   
   

2. USTR should consider conditioning favorable trade terms on demonstrable efforts by trading partners to crack down on the manufacture and export of illicit tobacco and nicotine products destined for the U.S. market.

3. USTR should work in coordination with U.S. Customs and Border Protection, the Food and Drug Administration, and other relevant agencies to strengthen interdiction of illicit ENDS products at the border, including through enhanced scrutiny of shipments from countries identified as major sources of illicit products.

4. USTR should ensure that tariff actions or trade remedies account for the significant tariff revenue losses attributable to mis-declared and undervalued illicit e-vapor imports.

The comments were submitted regarding Section 301 investigations into acts, policies, and practices of certain economies relating to structural excess capacity and production in manufacturing sectors.

Since its inception in 2025, Regulate Smarter has been advocating for common-sense reforms to address the flood of illegal and unregulated tobacco and nicotine products into the U.S., effectively enforce the Tobacco Control Act and restore order to the marketplace, emphasizing the need for both enforcement and authorization as part of a comprehensive approach.

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The Coalition for Smarter Regulation of Nicotine (Regulate Smarter) is comprised of members representing manufacturers, distributors, and retailers committed to operating responsibly within the U.S. Food and Drug Administration (FDA)-regulated marketplace. Regulate Smarter supports an FDA regulatory system that delivers on the original harm reduction vision of the Tobacco Control Act. Chaired by former U.S. Senator Richard Burr (R-NC), the Regulate Smarter Coalition is committed to advancing a modern, common-sense approach to regulating tobacco and nicotine that is grounded in science. To learn more, visit: https://www.regulate-smarter.org/