Tariffs On Tea

Trade Wars

China is the largest exporter of Tea and America will face .25c tariffs or 10%-15% as of September 1, 2019.

According to Cindi Bigelow, as reported by Courant.com, she is the president and CEO of Bigelow Tea, she says that yes the Trade Wars are going to affect the tea industry. This will drive the price of tea up and make specialty types more expensive.

The Bigelow Tea Company gets their green tea from China because they believe that China has the finest quality green tea and the company also uses some of the tea packaging components from China as well.

Remember The Resistance

The Tea Association of the USA would like us to hark back to our founding tenets of the early colonist’s resistance in America. We may recall our early history lessons in school that included The Tea Act of 1773. We do remember the colonist’s resistance sneaking in the darkness of night to dump tea in Boston harbor. The Tea Act was one of several imposed. While the current tariffs are not the same, they are similar. The tax and duty free imports on tea was a stipulation that precluded the American Revolutionary War, but helped raise the ire of the resistance.

So overall, the .25c tariffs sound minimal, but these tariffs will/have increased the price for consumers period.

Cause And Effect

Naturally, this is causing what is known as an “evasion strategy”. This means instead of sending the tea direct to the United States, the exporters and transporters will send the export tea to the nearest port where the country has no tariffs or they are lesser. From there they will ship the tea to the United States; thus avoiding the tea tariff all together.

While there are no true figures regarding how much this is going on, or how much true monies are being diverted, the administration knows it exists.

Tea Association Response

The Tea Association of the USA and President Peter F. Goggi submitted a position paper and provided testimony both in rebuttal as well as oral arguments during the 301 Committee hearings. The group serves to protect the American tea industry and tea interests, and they claim that these tariffs will result in damage to the American consumer and will erode the investor and consumer confidences. They claim it will not harm the Chinese Tea Industry but will harm only the businesses and interests of the United States. There is more to the tea industry than just tea; there are tea production, tea storage and tea technology, and tea advertisement to name just a few.

Wait And See

It will be a waiting game to see how long this takes place and the overall effects that the tariffs will have. The Tea Industry of the USA will continue to keep their constituents and tea businesses abreast of the changes and will aid and assist any of them. On a side note as well, cousin to the tea industry, is the coffee industry. They too as well may suffer some impact of the tariffs. As well some of the small batch tea companies also own small coffee companies and may take an overall huge “hit”.

Some Figures

China exports over 700 Billion tons of tea. While the United States does get tea from other countries, China remains on top as the leading importer to the USA in the guise of 42 million tons of tea. The imported tea to the United States is green tea, oolong tea, fermented and semifermented black tea, tea mate’, and specialty tea and tea blends.