US Tea Imports Under Threat Amid Rising Tariffs on Key Suppliers

The United States (US) tea industry is under mounting pressure as sweeping import tariffs imposed in 2025 have disrupted the global supply chain. Tea is a heavily imported commodity in the US, with the country sourcing the majority of its tea from international partners. This year, the US has introduced aggressive tariffs as part of its broader trade strategy, significantly impacting global food and beverage trade—including the tea sector. The repercussions are especially pronounced because the US does not produce tea at a scale large enough to support domestic consumption, making the nation deeply reliant on overseas producers.

US Heavily Dependent on Imported Tea from Tariff-Affected Nations

According to the ITC Trade Map, the US imported approximately 123.36 million metric tons (mmt) of tea in 2024, with India, Argentina, China, and Sri Lanka accounting for 63.4% of that volume, or 78.7 mmt. These countries have long served as the backbone of the US tea supply chain due to their quality. Any disruption in imports from these regions has the potential to create ripple effects across the entire US tea market. However, the newly implemented tariffs are now jeopardizing this well-established system, putting pressure on importers, retailers, and ultimately, consumers.

Figure 1. US Tea Imports From Top 4 Countries of Origin

The 2025 tariff hikes are particularly severe and have targeted the very countries that dominate US tea imports. China now faces a 125% import tariff, making Chinese-origin tea practically unaffordable for many US importers. India, Argentina, and Sri Lanka, while facing a baseline tariff of 10%, also have significantly higher suspended tariffs—ranging from 46% to 88%—set to resume on July 9, 2025, unless further exemptions are made. These increases are not only raising procurement costs but also injecting uncertainty into long-term trade planning, as importers face the challenge of adjusting sourcing strategies while bracing for potential cost escalations in mid-year.

Tightened Supply Expected to Drive Up US Tea Prices

With higher tariffs reducing the viability of importing large volumes, US tea supply is expected to tighten in the coming months. Importers may cut back on orders or shift their attention to lower-cost suppliers, potentially disrupting the availability of popular varieties and blends. This reduction in supply will likely lead to a rise in wholesale and retail prices, which in turn could prompt reduced consumption as price-sensitive consumers seek alternatives or exit the market. Over the longer term, this could erode demand and slow growth in a tea market that has otherwise seen steady gains, particularly in specialty and wellness-focused segments.

Chinese Tea Faces Steepest Barriers with 125% Tariff

Among the hardest hit is tea originating from China, which is now subjected to a 125% import tariff—a cost that is simply unsustainable for most US tea importers. China is one of the world’s largest tea producers and exporters, and its tea, especially green and oolong varieties, has historically been a key component of US imports. With such steep tariffs in place, many businesses are expected to stop sourcing from China altogether. This dramatic shift is not only reshaping sourcing decisions but also altering the diversity of tea products available to US consumers. Chinese tea importers may need to reorient their business models or explore value-added strategies to maintain relevance in the US market.

Strategic Realignment Needed to Secure Tea Supply

Given the escalating trade tensions and tariff environment, US importers are being forced to rethink their global sourcing strategy. Countries like Japan, India, Argentina, and Sri Lanka, which still have a manageable 10% tariff (at least until July), may become the preferred alternative sources for US buyers in the short term. These countries offer a broad range of high-quality tea varieties and already have well-established trade relationships with the US.

Regarding green tea, in particular, which has traditionally been sourced from China primarily, US buyers could look to Japan, a direct competitor to China in the US. In 2024, the US imported 5.74 million metric tons (mmt) of green tea from China, representing a 17.9% decline compared to 6.99 mmt in 2022. In contrast, US imports of Japanese green tea surged, rising to 3.28 mmt in 2024, a 53.3% increase from 2.41 mmt in 2022. This stark divergence signals a growing preference for Japanese green tea as a viable and increasingly favored alternative.

The shift is largely driven by the current trade landscape. Chinese tea now faces tariffs as high as 125%, making it significantly more expensive and less competitive in the US market. By comparison, Japanese tea is currently subject to a baseline tariff of 10%, making it a more attractive and sustainable sourcing option for American buyers—at least in the short term.

Figure 2. US Green Tea Imports From China and Japan

Moving forward, US buyers may further accelerate their pivot toward Japanese green tea to safeguard supply chains and manage costs. However, the situation remains uncertain. The July 9, 2025, deadline for the temporary suspension of higher tariffs on tea from Japan, India, and Sri Lanka looms large. If the US government reinstates the previously paused tariffs—46% for Japan, for instance—it could once again disrupt sourcing strategies and strain the already fragile tea supply chain.

US Tea Industry Braces for Tariff Fallout: Big Players Adapt, Small Firms Under Pressure

As US tariffs on imported tea escalate, larger tea companies appear better equipped to absorb the short-term impact, having likely built up inventory buffers to soften the financial blow. By doing so, these firms can delay passing along the full cost of tariffs to consumers—at least temporarily. Many are expected to tighten internal operations and streamline supply chains in a bid to extract efficiencies and offset the added cost of doing business. However, if these elevated tariffs persist into the second half of 2025 and beyond, consumers will ultimately face higher retail prices, as companies will have no choice but to pass through a portion—or all—of the tariff costs.

For smaller and mid-sized tea brands, the situation is more critical. Without the financial muscle or logistics infrastructure to absorb sustained cost pressures, these businesses may need to take more drastic short-term measures. These may include downsizing packaging, reducing product variety by consolidating stock-keeping units (SKUs), or adjusting formulations to reduce reliance on high-tariff imports. Such measures could help maintain affordability but may also limit consumer choice and brand competitiveness.

In the longer term, the US tea sector faces a structural challenge: domestic tea production is virtually nonexistent. Current estimates suggest that less than 0.02% of the tea consumed in the US is grown locally, highlighting the country's overwhelming dependence on imports for meeting demand—whether for green, black, or specialty teas. Unlike other commodities, tea lacks a viable domestic production base, meaning there is no feasible path to tea self-sufficiency in the US, even in the long term.

Recognizing this critical dependency, industry organizations like the Tea Association of the USA., Inc. have urged the US government to reconsider its stance. They argue that tea, as a non-substitutable, essential consumer good with no domestic production capacity, should be exempt from punitive tariffs. Labeling it a "daily necessity" for millions of Americans, these advocacy efforts are rooted in both economic logic and consumer impact. Without relief, continued tariff pressure could reshape the landscape of the US tea market, driving up costs, reducing variety, and threatening the survival of smaller businesses.