Few Americans can assess the immense impact of tariffs proposed for all Chinese goods, but they will easily notice the difference between a $6 box of 100 teabags and one that sells for $7.50 (a price that does not include sales tax).
Import taxes could conceivably cost Americans $135 billion, a sum that envisions economic patriotism comparable to financing a major war. America’s “get tough on China” stance has its fans, but no one interviewed favors adding 25% to the cost of importing Chinese tea.
The May 10 round of tariffs on $200 billion in Chinese goods is in effect. A final $300 billion round would impose import taxes of up to 25% on the remainder of the $539.5 billion of Chinese goods that Americans purchase annually. In contrast, China purchased only $120.3 billion worth of U.S. goods last year, including a small amount of tea (now subject to 25% Chinese tariff). The only products not on the list are pharmaceuticals, rare earth minerals, and some medical goods.
At the direction of President Donald Trump, the office of the U.S. Trade Representative invited public testimony prior to levying the latest round, setting a June 10 deadline for submissions.
The actual amount of the tariff has not been determined—only a range of 10-25%. All teas from China including flowering teas, concentrates, soluble tea, extracts, tea juice, and mate are named on the Harmonized Tariff Schedule.
China is the second largest tea supplier and the most important source of green tea, so increasing the price of Chinese tea will be significant. However, taxes on $30 billion in clothing; electrical equipment valued at $50 billion and $185 billion in computers and electronics will ultimately cost Americans a lot more in taxes. Shoe executives predict canvas sneakers will increase by $15 and running shoes and boots by $50.
As the June 17 public hearings near, tea industry and trade association leaders are making their case in writing and hoping for an opportunity to voice their concerns. The intent is to exempt tea, or at least minimize the import tax. If that fails, tariffs could be enforced as soon as June 24. As of May 28, 113 comments had been submitted.
Follow this link to see the Tea Association of the USA’s two-page request to appear in which association president Peter Goggi articulates his concern.
In the meantime, tea importers and blenders are speeding up shipments, stockpiling tea, substituting other origins (Japan, Indonesia, and Vietnam, even India) for Chinese green tea and cautioning clients to brace for price increases and a difficult period of transition.