[17] Estimates put Chinese counterfeit production as high as 400 billion cigarettes per year to meet international demand.[18] Because of the enormous volume of product that ships into US ports from China, it may be easier and lower cost to smuggle Chinese cigarettes into California markets through US ports than to try to capitalize on tax arbitrage by transporting products across the continental US
In 2020, following a long-term investigation into an individuals cigarette smuggling activity, a process including court-authorized search warrants, wiretaps, grand jury subpoenas, and other investigative tools, New York seized more than $1.3 million in cash and 6,267 cartons of untaxed cigarettes, according to a press release from the Queens District Attorney.[2] But even law enforcement successes are costly and only stop a drop of water in the Hudson River of smuggling activity
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