STiR coffee and tea magazine

36 STiR coffee and tea | 2025 Quarter 2 Summer (Jun/jul/Aug) Instead of matching the tariff rates of its trading partners, the US has imposed punitive duties on countries that maintain a trade surplus with the US, regardless of whether those countries impose high tariffs themselves. According to the administration, China "charges" US im- porters the equivalent of a 67% tariff, the European Union charges 39%, Taiwan charges 64%, India 52%, and Vietnam charges 90%. Actual tariffs are significantly lower; for example, China imposes duties of 15% on inbound tea from the US. In most countries that Trump cited, the tariffs on tea imported into the US are zero. Punishing China China, the world's largest tea producer, raised tariffs on all US goods to 125% and announced it would not match the US rate. Instead, China is responding selectively, canceling orders for Boeing airliners, prohibiting the export of select minerals and canceling orders for US soybeans in favor of Brazil. Only 14.8% of China's exports are shipped to the United States, and tea is a tiny slice (0.0014%) of that total. In 2024, 3% of China's tea exports were destined for the US, which imported approximately 12,000 of the total 374,000 met- ric tons shipped. Sales to the US were valued at $6.14 million, out of the $1.74 billion worth of tea China exported that year, representing 0.35% of the total value. Wholesalers stockpiled warehouses in anticipation of the high tariffs, but Chinese imports declined after the US imposed a 152.5% tea tariff. In 2024, tea imports were assessed at 7.5% of the declared value, a rate reduced in 2020 from the 15% tariff imposed by the first Trump Administration in 2018. On February 1, the second Trump Administration ordered the first of two 10% increases in tariffs on Chinese-grown tea, resulting in duties of 17.5%, paid on Chinese tea regardless of the shipping origin. The following month, on March 4, tariffs were further increased by 10% in response to China's additional tariffs on American goods. Many countries adjacent to China, such as Vietnam, Cam- bodia, and Thailand, will incur reciprocal tariffs of 20-40% and find no respite. The high rates are to discourage China from producing goods in satellite factories to minimize tariffs. In contrast, India, which imposes a 128% combination of tariffs, taxes, and fees on imported tea, faces 26% US tariffs— roughly a third of the rate imposed on China, partly because it is in discussions with the US to lower tariffs on a range of goods. Together, China (152.5% tariff), Vietnam (46% tariff), India (26% tariff), and Japan (24% tariff) shipped more than 70,000 metric tons of tea to the US in 2024, accounting for approxi- mately 57% of the tea Americans consumed that year. Consumer Impact American tea lovers who paid $15 for a 250-gram pouch of tea shipped from China in February will now pay $37.90, which includes a $22.90 duty charge. A 250g pouch from Vietnam will cost $22.35. Retailers may absorb the 10% tariffs imposed on most countries, but with rates ranging from 20% to 150%, they are more likely to pass the cost on to consumers. More ominous for online tea buyers purchasing from China is the May 2 elimination of the de minimis tariff exemption, which had accelerated online sales valued at billions, including large volumes of low value tea shipments. Previously, purchases of Chinese tea valued at less than $800 were exempt from tariffs. Customs and Border Patrol processes more than four mil- lion de minimis shipments daily. In 2022, 83% of all US eCommerce imports used the de minimis loophole. Importers that qualified for the $800 or less exemption now face a duty of either 120% of the value or $100 per shipment, whichever is larger-the $100 tax increases to $200 per shipment after June 1. American tea lovers who paid $15 for a 250-gram pouch of tea shipped from China in February will now pay $37.90, which includes a $22.90 duty charge. Photo courtesy Diana Jendoubi Wholesalers stockpiled warehouses in anticipation of the high tariffs, but Chinese imports declined after the US imposed a 152.5% tariff on tea. Photo courtesy Diana Jendoubi

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