Page 1 GAO-17-515R Electronic Cigarettes

441 G St. N.W.

Washington, DC 20548

Accessible Version

April 24, 2017

The Honorable Ron Wyden

Ranking Member

Committee on Finance

United States Senate

Electronic Cigarettes: U.S. Imports in 2016

Dear Senator Wyden:

Over the last decade, 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 in May 2015, most e-cigarettes sold in the United States were thought to be

imported, but e-cigarette import volume and tariff revenue were unknown because the 

Harmonized Tariff Schedule of the United States (HTS) did not contain separate statistical 

reporting numbers (also known as 10-digit HTS numbers or codes) specific to e-cigarettes.1

Instead, imports of e-cigarette devices, e-cigarette parts, and e-cigarette liquid were entered 

under HTS statistical reporting numbers that the U.S. International Trade Commission (USITC) 

calls basket categories, which cover a range of goods.

An e-cigarette device typically contains a battery, a heating element, and a cartridge or tank that 

can 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 can 

contain nicotine in different concentrations or have no nicotine—can also be imported 

separately from both devices and cartridges.

In the fall of 2015, the Committee for Statistical Annotation of Tariff Schedules—comprising

representatives from USITC, U.S. Customs and Border Protection (CBP), and the U.S. Census 

Bureau (Census)—established six new statistical reporting numbers for e-cigarette devices, 

parts, and liquid in the HTS. The six new statistical reporting numbers went into effect on 

January 1, 2016, and covered

 

1GAO, Electronic Cigarettes: Imports, Tariffs, and Data Collection, GAO-15-491R (Washington, D.C.: May 7, 2015). 

All goods imported into the United States are classified by U.S. Customs and Border Protection according to the HTS. 

The HTS, published and maintained by the U.S. International Trade Commission, 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.
· e-cigarette liquid that contains 5 percent or more by weight of nicotine (3824.90.2840) or 

less than 5 percent by weight of nicotine (3824.90.9280),

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2

· e-cigarette devices with cartridges that contain liquid with nicotine (8543.70.9630) or without 

nicotine (8543.70.9640),

3 and

· e-cigarette parts, including cartridges imported separately from devices that contain liquid 

with nicotine (8543.90.8850) or without nicotine (8543.90.8860).

You requested that we report on e-cigarettes imported into the United States in 2016. We 

analyzed the e-cigarette import data for calendar year 2016, the first year such data were 

collected by the U.S. government. To analyze U.S. e-cigarette imports, we used 2016 data that 

were available in February 2017 from the public Interactive Tariff and Trade DataWeb database 

maintained by USITC, which incorporates U.S. trade statistics published by Census.4 We 

analyzed import data for the six statistical reporting numbers that covered e-cigarette devices, 

parts, and liquid in calendar year 2016. For each statistical reporting number, we analyzed 

customs value, dutiable customs value, tariff revenue, country of origin, and port of entry. We 

also analyzed data on quantities for the four e-cigarette statistical reporting numbers for which 

quantity is tracked.

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 2016 

trade data. Census revises trade data periodically, and its first official revisions of 2016 trade 

data will be available in the summer of 2017.

To assess the reliability of the data, we reviewed agency documents about U.S. foreign trade 

statistics and interviewed CBP and Census officials about how the data were collected, how 

they were checked, and any limitations of the data. According to the officials we interviewed, the 

quality of trade data associated with new statistical reporting numbers improves over time both 

because the trade community learns to use them correctly and because Census is able to 

develop checks tailored for specific commodities or statistical reporting numbers. We 

determined that the 2016 data on U.S. e-cigarette imports that were available in February 2017 

were sufficiently reliable for the purposes of presenting annual descriptive statistics but not for 

reporting monthly import data. We do not present monthly data in this report for the following 

reasons:

· We observed an upward trend in overall customs value for U.S. e-cigarette imports in 2016. 

Based on our interviews with agency officials, we concluded that it is not yet known if the 

data reflect an actual trend or the importers’ improved use of the new e-cigarette statistical 

reporting numbers over the course of 2016.

 

2Presidential Proclamation 9549 implementing international changes to the HTS, which took effect on January 1, 

2017, resulted in the renumbering of HTS statistical categories 3824.90.2840 and 3824.90.9280 to 3824.99.2840 and 

3824.99.9280, respectively.

3Presidential Proclamation 9466, which took effect on July 1, 2016, resulted in the renumbering of HTS statistical 

categories 8543.70.9630 and 8543.70.9640 to 8543.70.9930 and 8543.70.9940, respectively. The units of quantity 

used for the new statistical categories were changed, enabling the tracking of the number of imported e-cigarette 

devices.

4See https://dataweb.usitc.gov/.
· We observed considerable monthly fluctuations in unit values (customs value divided by 

quantity) for e-cigarette liquid and devices. It is not yet known if these values are accurate or 

reflect data errors.

· We identified a notable error in the monthly data for one statistical reporting number. The 

2016 data show a quantity for January 2016 for e-cigarette liquid containing less than 5 

percent of nicotine by weight (classified under HTS number 3824.90.9280) that is more than 

30 times the average value for the remaining months: 338,178 kilograms compared to the 

monthly average of 10,090 kilograms for February through December 2016. In response to 

our inquiries, CBP officials determined that this quantity was incorrect because of importer 

misclassification of some goods. According to Census officials, the corrected January 2016 

data for HTS number 3824.90.9280 will be reflected in the revised 2016 data that will be 

released in the summer of 2017. The annual descriptive statistics we report for that

e-cigarette product, and totals across all imported e-cigarette products, contain a value of 

zero for January, which we note in presenting the data.

We conducted this performance audit from January 2017 to April 2017 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 obtained 

provides a reasonable basis for our findings and conclusions based on our audit objectives.

In summary we found the following:

· In calendar year 2016, customs value of U.S. e-cigarette imports was about $342 million; of 

that amount, $323 million was dutiable value resulting in about $9 million in tariff revenue 

(see table 1). E-cigarette devices accounted for $204 million (or almost 60 percent), parts for 

$108 million (almost 32 percent), and liquid for $30 million (almost 9 percent) of total 

customs value. 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. Dutiable value is defined as the customs value of foreign 

merchandise imported into the United States that is subject to tariff. In some cases, the 

dutiable value can be zero, if goods imported from a particular country are not subject to 

tariff.

· Although e-cigarettes, parts, and liquid were imported from 41 countries in 2016, e-cigarette 

imports from China accounted for about 91 percent of U.S. e-cigarette imports by customs 

value (see table 2). Imports from China also accounted for at least 98 percent of customs 

value for devices with nicotine and parts with and without nicotine (see table 3).

· In 2016, importers brought in 481,400 kilograms of e-cigarette liquid with higher nicotine 

content compared to 110,994 kilograms of liquid with lower nicotine content. From July 

through December 2016, importers brought in about 5.6 million e-cigarette devices with 

nicotine-containing liquid and about 5.3 million devices with nicotine-free liquid (see table 

4).

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5

 

5Quantities were tracked for e-cigarette liquid from January 1, 2016, and began to be tracked for e-cigarette devices 

on July 1, 2016.
· U.S. e-cigarette imports cleared customs at 34 ports of entry; the top five ports of entry—

Cleveland, Los Angeles, Savannah, Norfolk, and Seattle—accounted for 81 percent of 

customs value of U.S. e-cigarette imports in 2016 (see table 5).

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6

More detailed information is included in tables 1 through 5.

Table 1: Data Summary for U.S. E-cigarette Imports in 2016

E-cigarette product, Harmonized 

Tariff Schedule (HTS) number, 

and tariff rate

Customs

value (dollars)

Dutiable 

customs

value (dollars)

Tariff revenue

(dollars)

Liquida

E-liquid (nicotine content of 5

percent or more)

 HTS 3824.90.2840

 Tariff rate: 6.5 percent of dutiable 

customs value

26,617,601 26,005,531 1,690,364

E-liquid (nicotine content of less 

than 5 percent)

b

 HTS 3824.90.9280

 Tariff rate: 5 percent

2,888,820 2,684,570 134,249

Subtotal for liquid 29,506,421 28,690,101 1,824,613

Devicesc Devices (imported with nicotine)

 HTS 8543.70.9630 (January–June 

2016)

 HTS 8543.70.9930(July–

December 2016)

 Tariff rate: 2.6 percent

54,031,562 54,028,197 1,404,745

Devices (imported without nicotine)

 HTS 8543.70.9640 (January–June 

2016)

 HTS 8543.70.9940 (July–

December 2016)

 Tariff rate: 2.6 percent

150,339,057 131,854,876 3,428,330

Subtotal for devices 204,370,619 185,883,073 4,833,075

Partsd

Parts (imported with nicotine)

 HTS 8543.90.8850

 Tariff rate: 2.6 percent (January–

June 2016)

 1.9 percent (July–

December 2016)

26,302,044 26,275,168 584,030

Parts (imported without nicotine)

 HTS 8543.90.8860

 Tariff rate: 2.6 percent (January–

June 2016)

 1.9 percent (July–

December 2016)

82,078,224 81,888,575 1,648,097

Subtotal for parts 108,380,268 108,163,743 2,232,127

Total Total 342,257,308 322,736,917 8,889,815

Source: GAO analysis of U.S. Census Bureau data as retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed 

Feb. 9, 2017). | GAO-17-515R

 

6The port of entry is 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.
Notes: 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. Dutiable value is defined as the customs value of foreign 

merchandise imported into the United States that is subject to tariff.

a

According to the HTS, “mixtures for use in personal electric or electronic vaporizing devices means a formulated 

liquid, whether or not containing nicotine, and whether or not packaged for retail sale in cartridges or tanks adaptable 

to such devices” (see HTS ch. 38, statistical note 3). Ten-digit HTS number (also known as statistical reporting 

number) 3824.90.2840 covered e-cigarette liquid containing 5 percent or more by weight of nicotine; HTS number 

3824.90.9280 covered liquid containing less than 5 percent by weight of nicotine. Presidential Proclamation 9549, 

which took effect on January 1, 2017, resulted in the renumbering of 3824.90.2840 and 3824.90.9280 to

3824.99.2840 and 3824.99.9280, respectively. Liquid quantity is tracked in kilograms.

b

In this table, the summary data for customs value, dutiable value, and tariff revenue for HTS number 3824.90.9280 

cover the period from February through December 2016 because of an error in the January 2016 data. According to 

U.S. Census Bureau officials, the corrected January 2016 data for HTS number 3824.90.9280 will be reflected in the 

revised 2016 data that will be released in the summer of 2017.

cHTS numbers for devices cover both closed-system and open-system e-cigarettes if they are imported as functional 

devices with or without cartridges. The difference between the two sets of HTS numbers for devices is nicotine 

content. Presidential Proclamation 9466, which took effect on July 1, 2016, resulted in the renumbering of 

8543.70.9630 and 8543.70.9640 to 8543.70.9930 and 8543.70.9940, respectively. The units of quantity used for the 

new HTS numbers were changed, enabling the tracking of the number of imported e-cigarette devices.

dHTS numbers for e-cigarette parts 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. The difference between the 

two statistical reporting numbers for e-cigarette parts is nicotine content of substances in cartridges. The tariff rate for 

e-cigarette parts was 2.6 percent of dutiable customs value from January 1 through June 30, 2016. The lower tariff 

rate of 1.9 percent took effect on July 1, 2016, as a result of Presidential Proclamation 9466. Quantity of e-cigarette 

parts is not tracked.

Table 2: Customs Value of U.S. E-cigarette Imports by Country of Origin in 2016

Page 5 GAO-17-515R Electronic Cigarettes

41 countries, in actual dollars

Country

Customs valuea

Dollars Percentage

China 313,009,762 91.45

Canada 11,555,599 3.38

Mexico 9,434,594 2.76

Germany 1,998,540 0.58

United Kingdom 1,621,301 0.47

Israel 856,402 0.25

France 653,978 0.19

Austria 620,404 0.18

Japan 487,278 0.14

Switzerland 392,636 0.11

Italy 300,315 0.09

South Korea 225,664 0.07

Taiwanb146,639 0.04

Denmark 133,761 0.04

Poland 121,811 0.04

Panama 109,968 0.03
Page 6 GAO-17-515R Electronic Cigarettes

Country

Customs valuea

Dollars Percentage

Netherlands 82,164 0.02

India 73,132 0.02

Hungary 55,626 0.02

Malaysia 51,317 0.01

Singapore 47,694 0.01

Australia 39,093 0.01

Ireland 35,176 0.01

New Zealand 32,823 0.01

Slovak Republic 28,730 0.01

Sweden 28,187 0.01

Russia 26,712 0.01

Vietnam 14,960 0.00

Romania 14,010 0.00

Croatia 10,000 0.00

Spain 8,901 0.00

Costa Rica 8,393 0.00

Philippines 7,020 0.00

Indonesia 5,000 0.00

Jordan 3,721 0.00

Bulgaria 3,215 0.00

Lithuania 2,791 0.00

Norway 2,744 0.00

Slovenia 2,448 0.00

Czech Republic 2,400 0.00

Thailand 2,399 0.00

Total 342,257,308 100.00 

Source: GAO analysis of U.S. Census Bureau data as retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed 

Feb. 9, 2017). | GAO-17-515R

aCountry totals for customs value cover the entire calendar year 2016 for all e-cigarette Harmonized Tariff Schedule 

(HTS) numbers except HTS number 3824.90.9280. Customs value for HTS number 3824.90.9280 covers the period 

from February through December 2016 because of an error in the January 2016 data. According to U.S. Census 

Bureau officials, the corrected January 2016 data for HTS number 3824.90.9280 will be reflected in the revised 2016 

data that will be released in the summer of 2017. The top 10 countries—China (including Hong Kong) through 

Switzerland—account for 99.5 percent of the total customs value of U.S. e-cigarette imports.

b

The United States does not have diplomatic relations with Taiwan; the data we used list Taiwan as a country and 

break out imports from Taiwan separately.
Table 3: Customs Value of U.S. E-cigarette Imports by Country of Origin and Product in 2016

Page 7 GAO-17-515R Electronic Cigarettes

41 countries, in millions of dollars

Country

Liquid Devices Parts

Total by

country

With 5 percent

or more of 

nicotinea

With less than

5 percent of 

nicotineb

With

nicotinec

Without 

nicotined

With

nicotinee

Without 

nicotinef

China 24.671 1.581 53.865 125.987 26.157 80.750 313.010 

Canada 0.139 0.084 - 11.214 0.016 0.103 11.556 

Mexico - - - 9.403 - 0.032 9.435 

Germany - 0.191 0.017 1.612 0.006 0.174 1.999 

United Kingdom 0.744 0.110 0.030 0.605 0.009 0.124 1.621 

Israel 0.453 - - 0.246 - 0.158 0.856 

France 0.153 0.241 0.003 0.176 0.008 0.073 0.654 

Austria 0.100 0.115 0.055 0.136 0.025 0.191 0.620 

Japan 0.197 0.112 0.005 0.148 - 0.025 0.487 

Switzerland - 0.104 - 0.104 0.003 0.183 0.393 

Other (31 countries) 0.161 0.353 0.057 0.710 0.077 0.268 1.627 

Total by product 26.618 2.889 54.032 150.339 26.302 82.078 342.257 

Source: GAO analysis of U.S. Census Bureau data as retrieved from the U.S. International Trade Commission Interactive Trade DataWeb (accessed 

Feb. 9, 2017). | GAO-17-515R

Notes: The top 10 countries—China (including Hong Kong) through Switzerland—account for 99.5 percent of the total 

customs value of U.S. e-cigarette imports. See table 2 for a complete list of countries. The numbers may not add up 

precisely because of rounding.

aHarmonized Tariff Schedule (HTS) number 3824.90.2840—replaced with 3824.99.2840 on January 1, 2017—

covered e-cigarette liquid containing 5 percent or more by weight of nicotine.

bHTS number 3824.90.9280—replaced with 3824.99.9280 on January 1, 2017—covered e-cigarette liquid containing 

less than 5 percent by weight of nicotine. In this table, customs value for HTS number 3824.90.9280 covers the 

period from February through December 2016 because of an error in the January 2016 data. According to U.S.

Census Bureau officials, the corrected January 2016 data for HTS number 3824.90.9280 will be reflected in the 

revised 2016 data that will be released in the summer of 2017.

cHTS number 8543.70.9930—which replaced 8543.70.9630 on July 1, 2016—covers e-cigarette devices imported 

with cartridges filled with liquid containing nicotine.

dHTS number 8543.70.9940—which replaced 8543.70.9640 on July 1, 2016—covers e-cigarette devices imported 

with cartridges filled with nicotine-free liquid.

eHTS number 8543.90.8850 covers major e-cigarette parts, including cartridges containing heating elements and 

filled with liquid containing nicotine, that are imported separately from devices.

fHTS number 8543.90.8860 covers major e-cigarette parts, including cartridges containing heating elements and filled 

with nicotine-free liquid, that are imported separately from devices.
Table 4: Quantity and Customs Value of E-cigarette Liquid and Devices Imported into the United States in 

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2016

Liquid

Quantity

(kg)

Customs value 

(dollars)

Liquid with 5 percent or more of nicotine (January–December)a481,400 26,617,601

Liquid with less than 5 percent of nicotine (February–December)b110,994 2,888,820

Devices

Quantity

(number)

Customs value 

(dollars)

Devices with nicotine (July–December)c5,637,744 26,066,916

Devices without nicotine (July–December)d5,311,204 97,867,572

Source: GAO analysis of U.S. Census Bureau data as retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed 

Feb. 9, 2017). | GAO-17-515R

Notes: Tracking of quantity of imported e-cigarette liquid took effect on January 1, 2016; tracking of quantity of 

imported e-cigarette devices began on July 1, 2016.

aHarmonized Tariff Schedule (HTS) number 3824.90.2840—replaced with 3824.99.2840 on January 1, 2017—

covered e-cigarette liquid containing 5 percent or more by weight of nicotine.

bHTS number 3824.90.9280—replaced with 3824.99.9280 on January 1, 2017—covered e-cigarette liquid containing 

less than 5 percent by weight of nicotine. In this table, quantity and customs value for HTS number 3824.90.9280 

cover the period from February through December 2016 because of an error in the January 2016 data. According to 

U.S. Census Bureau officials, the corrected January 2016 data for HTS number 3824.90.9280 will be reflected in the 

revised 2016 data that will be released in the summer of 2017.

cHTS number 8543.70.9930—which replaced 8543.70.9630 on July 1, 2016—covers e-cigarette devices imported 

with cartridges filled with liquid containing nicotine.

dHTS number 8543.70.9940—which replaced 8543.70.9640 on July 1, 2016—covers e-cigarette devices imported 

with cartridges filled with nicotine-free liquid.
Table 5: Customs Value of U.S. E-cigarette Imports by Port of Entry in 2016

Page 9 GAO-17-515R Electronic Cigarettes

34 ports of entry, in actual dollars

Port of entry

Customs valuea

Dollars Percentage

Cleveland, OH 83,828,226 24.49

Los Angeles, CA 79,065,697 23.10

Savannah, GA 48,324,446 14.12

Norfolk, VA 33,524,990 9.80

Seattle, WA 32,532,897 9.51

Miami, FL 11,033,970 3.22

Detroit, MI 10,146,590 2.96

Laredo, TX 6,661,991 1.95

Charlotte, NC 6,465,758 1.89

Chicago, IL 5,820,868 1.70

San Francisco, CA 5,807,383 1.70

New York, NY 5,240,342 1.53

New Orleans, LA 3,112,414 0.91

El Paso, TX 1,814,928 0.53

Nogales, AZ 1,688,568 0.49

Buffalo, NY 1,378,946 0.40

Boston, MA 995,126 0.29

San Diego, CA 882,153 0.26

Dallas-Fort Worth, TX 826,516 0.24

Tampa, FL 618,252 0.18

Great Falls, MT 598,996 0.18

Philadelphia, PA 531,016 0.16

Anchorage, AK 439,289 0.13

St. Louis, MO 352,094 0.10

Charleston, SC 156,941 0.05

Houston-Galveston, TX 144,425 0.04

Columbia-Snake, OR 87,672 0.03

Ogdensburg, NY 65,006 0.02

Baltimore, MD 52,500 0.02

Washington, DC 31,565 0.01

Portland, ME 14,153 0.00

Minneapolis, MN 6,920 0.00

St. Albans, VT 4,129 0.00

Honolulu, HI 2,541 0.00

Total 342,257,308 100.00 

Source: GAO analysis of U.S. Census Bureau data as retrieved from the U.S. International Trade Commission’s Interactive Trade DataWeb (accessed 

Feb. 9, 2017). | GAO-17-515R
Notes: The port of entry is 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.

a

Port-of-entry totals for customs value cover the entire calendar year 2016 for all e-cigarette Harmonized Tariff 

Schedule (HTS) numbers except HTS number 3824.90.9280. Customs value for HTS number 3824.90.9280 covers 

the period from February through December 2016 because of an error in the January 2016 data. According to U.S. 

Census Bureau officials, the corrected January 2016 data for HTS number 3824.90.9280 will be reflected in the 

revised 2016 data that will be released in the summer of 2017.

Agency Comments

Page 10 GAO-17-515R Electronic Cigarettes

We provided a draft of this report to USITC, CBP, and Census. We received technical 

comments from USITC 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 Celia Thomas (Assistant Director), Sada Aksartova, and Grace Lui.

Sincerely yours,

David Gootnick

Director, International Affairs and Trade 

(101355)