STiR coffee and tea magazine

34 STiR coffee and tea | 2025 Quarter 2 Summer (Jun/jul/Aug) F By Dan Bolton Tea Origins Battered by Unprecedented US Tariffs our of the top five tea exporters supplying the US face punishing "reciprocal" tariffs imposed by the Trump Administration. US trade officials say every business globally will incur a "baseline" 10% duty on products shipped to the United States effective April 9. Another 60 will pay the baseline plus "reciprocal" tariffs in the 20-50% range. President Trump suspended the enforcement of reciprocal tariffs until July 9, except for goods from China, which are subject to at least 145% tariffs. US importers purchasing Chinese or Hong Kong tea must pay duties equal to 152.5% of the declared value, adding significant costs likely to be passed along to consumers. Only a few tea-producing countries paid tariffs before the announcement. Retaliate or Concede Confronted with harsher rates than expected, China retaliated with tariffs of 125% on all US imports. The EU imposed retaliatory tariffs on limited goods. Canada also retaliated with increased duties on most goods. Tea, however, is exempt from most US duties under the provisions of the USMCA free trade agreement. Japan is considering imposing retaliatory tariffs but has not officially announced its intentions. Negotiations are underway with 17 countries including tea producers India, Japan, South Korea, Malaysia, Vietnam, Cambodia, Thailand, Argentina, and Australia. In response, President Trump said he is willing to agree to "fair deals" on trade if trading partners make concessions. The US and China announced trade negotiations would begin May 10. Vietnam, Sri Lanka, Taiwan, and In- dia requested a delay in imposing tariffs and offered concessions—none of these countries previously paid tariffs on tea. Vietnam has stated that it is willing to eliminate tariffs on US goods. Argentina and Kenya are among the countries that will learn to live with low tariffs. At the same time, Indonesia, Bangladesh, and Sri Lanka will face tariffs of 32%, 37%, and 44%, respectively, which are insur- mountable in competitive global markets. China, which imposed a 15% tariff on US tea imports in 2018, now faces a 152.5% "reciprocal" tariff on tea. Tea exported by members of the European Union, including Germany, Belgium, and the Netherlands, is now subject to 20% tariffs. The rate for Switzerland, where Nestea is headquartered, is 31%. Nestle exports $200 million worth of Nestea annually. North America is one of the company's key markets. Duties on tea from the UK, previously covered in free trade agreements, are now sub- ject to a 10% tariff. China, which imposed a 15% tariff on US tea imports in 2018, now faces a 152.5% "reciprocal" tariff on tea. Indonesia, Bangladesh, and Sri Lanka will face tariffs of 32%, 37%, and 44%, respectively, which are insurmountable in competitive global markets. Photo courtesy Diana Jendoubi

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