A tea tax once caused a rebellion. This time it only causes a headache.
Importers of the precious leaf have seen costs rise, orders backlog and profits shrink under the weight of President Trump’s tariffs. Even after President Trump granted a reprieve, tea traders say the damage will not be reversed quickly.
“It took us a while to get through this tariff system, and it will take us a while to get out of this system,” says Bruce Richardson, a renowned tea master and tea historian who serves tea at his shop Elmwood Inn Fine Teas in Danville, Kentucky. “Customized tea is still coming out of our warehouses.”
While some large companies support the biggest supermarket brands, the premium tea market is primarily made up of small businesses: family farms, specialty importers, and a web of small tea shops, tea rooms, and tea cafes across the United States. Amid the onslaught of tariffs, they have become a showcase for the impact of tariffs.
Stores have a narrower selection of products, and some teas are no longer available because they can no longer keep them in stock due to high tariffs. In warehouses, managers are plagued by uncertainties and operational headaches, such as calculating the true cost of blending raw materials from multiple countries on a roller coaster of tariffs. And in backrooms filled with the scent of fresh tea, owners are being forced to postpone hiring, raises, advertising and other investments to free up cash to pay customs duties when containers arrive at U.S. ports.
“If you add up all the money we spent on tariffs that we didn’t have a year ago, it could be the equivalent of one new employee,” said Hartley Johnson, owner of Mark T. Wendell Tea Company in Acton, Massachusetts.
Johnson’s price used to remain static for more than a year. He ate up the cost of tariffs before being forced to respond. His most popular tea, a smoky Taiwanese tea called Hu-Kwa, rose steadily in price from $26 to $46 per pound.
He knows some customers are having second thoughts.
“Where is that tipping point?” asks Johnson. “I realized that that tipping point is happening now.”
A tea company in a commercial city had already reached a turning point.
International tea importers, already under financial strain from climate change and the COVID-19 pandemic, said the tariffs were the final blow, creating an unsustainable cash crunch and forcing them to close after 35 years in business.
“The financing was over-leveraged, not only from inventory but also from tariffs,” said CEO Brendan Scher.
Despite other financial challenges, Shah said it might have been able to survive without the tariffs.
“Unpredictable tariff policy has created the final insurmountable barrier,” he wrote to clients.
President Trump lifted some tariffs on agricultural products last week, but many in the tea industry are wary of celebrating too soon, warning tea drinkers shouldn’t celebrate either. Much of next year’s supply has already been imported and subject to tariffs, so the full impact of tariffs may not be felt.
Meanwhile, prices continue to rise due to other tariffs. All kinds of other products imported by the tea industry, such as teapots and infusers, remain subject to taxes, and some U.S.-made products, such as packaging cans, rely on foreign materials, driving up costs.
“Canisters, bamboo boxes, matcha whisks, everything we import and sell is affected by the tariffs,” said Gilbert Tsang, owner of MEM Tea Imports in Wakefield, Massachusetts.
Despite tea’s reigning supreme status worldwide and being the most consumed beverage other than water, it has long been overshadowed by coffee in the United States. Still, tea has been deeply intertwined with American history from the beginning, even before settlers angry about tariffs dumped tons of tea into Boston Harbor.
Boston may be run by Dunkin’ now, but Boston was born on tea.
The 1773 Rebellion, which became known as the Boston Tea Party, arose from the British Parliament’s implementation of a tea tax on colonists who refused to be taxed without government representation. After the independence of the United States, one of the new government’s first major acts, the Tariff Act of 1789, legislated import taxes on a variety of products, including, ironically, tea. But over time, trade policy began to include carve-outs for many products that Americans depend on but do not produce.
For more than 150 years, most tea has passed through U.S. ports duty-free.
That began to change with President Trump’s tough stance on China during his first term. But it’s nothing compared to a return to the White House.
In July, the most recent month for which the U.S. International Trade Commission tallied tariff rates, the average tax rate on tea was more than 12%, a sharp increase from a year earlier, when it was just under one-tenth of a percent. During that month, American businesses and consumers paid more than $6 million in tea import taxes, racking up more duties in just 31 days than in any previous full year on record.
“Once again, it’s taxation without representation,” said Richardson, an adviser to the Boston Tea Party Ship Museum. “Our wants and needs and our voices are not being heard because Congress is avoiding the problem by simply allowing the president to act like King George III.”
Overall, tea importers paid about $19.6 million in duties in the first seven months of 2025, almost seven times more than in the same period last year.
All of this is perplexing to those immersed in the world of tea, which relies on foreign countries for nearly all of the billions of pounds that Americans brew each year. Although there are many small tea plantations in the United States, they are only able to fill Americans’ cups of tea for a few hours each year.
“We don’t have an industry and we can’t produce it overnight,” said Angela McDonald, president of the American Tea Growers Federation.
Sedensky writes for The Associated Press.
