<tag> > <tag> indents with a 4 space tab, instead of .vimrc defined tab size

[zachschultz]

My .vimrc in regards to tab looks like:

set shiftwidth=2▸       " Number of auto-indent spaces¬
set smartindent▸" Enable smart-indent¬
set smarttab▸   " Enable smart-tabs¬
set softtabstop=2▸      " Number of spaces per Tab¬ 

For the most part, <C-e> works well, but when I try to convert a line like ul > li * 3 to HTML I get a 4 space tab, instead of my user-defined 2 space tab. Is there something I'm missing here?