Recent tariffs and trade policy changes are driving up the cost of imported tea, with impacts being felt by consumers through higher prices and businesses through increased operational costs and potential supply chain disruption. For instance, higher tariffs on tea from India, Japan, and China, alongside tariffs on aluminum for cans, threaten iconic products like AriZona Iced Tea. The situation is causing concern for small businesses, leading to price increases and potential replacement of some teas with alternative, domestic options like yaupon. It is creating uncertainty in markets like the one for Japanese matcha. 

Impact on Consumers and Businesses

• • Rising Prices:. Tariffs increase the cost of imported tea. Businesses often pass this burden on to consumers, leading to higher prices for everyday tea and coffee products. 

• • Threat to Small Businesses:. Businesses with tight profit margins are at risk of being squeezed out of the market due to increased import costs. No doubts, they hit most on small businesses or those prioritizing authentic products.

• • Supply Chain Strain:. The tariffs create instability and force companies to find alternative sourcing, which can lead to shortages of specific products, such as matcha. 

Specific Examples

• • Matcha Shortage: High demand in combination with U.S. tariffs is contributing to a shortage of matcha, impacting Japanese-owned businesses.
  • Domestic Alternatives: The increased cost of imported tea creates a unique opportunity for domestic producers, such as Florida-based yaupon tea companies. 

The Broader Context

• • Trump Administration Policies:. The tariffs are part of a broader trade strategy by the Trump administration aimed at rebalancing trade imbalances. But they have led to “unsustainable” costs for some importers. 
  • Uncertainty in Negotiations:. While trade negotiations are ongoing for some countries, like China, they contribute to uncertainty in the tea supply chain. They can lead to drastic price drops when the boom eventually subsides.