Today, we wanted to touch upon some recent current events happening in the tea market & keep you up to date. On May 10th, in Washington, the U.S. Trade Representative Robert Lighthizer announced a tariff increase on Chinese goods of 10% to 25% effective immediately.
The US tariff will apply to tea and tea ware from China. What does this mean for you & what should you expect?
Immediately, you shouldn't expect any changes due to the goods already in transit from China being exempt from this tariff. China also increased their tax on U.S. goods that include coffee that will take effect on June 1st.
Some different teas that we carry here at Good Life Tea include Yunnan, our oolongs, Silver Needles, and our puerhs. These teas are known as estate teas & are known for the different locations in China where they are grown. These teas will feel the full force of the tariffs.
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Many of our teas are blends which include Chinese grown teas. These blends are created in Canada and the USA. The tariff will be lower on these blended teas as they include smaller amounts of Chinese tea. Because of the tariff, we can expect to see more blended flavored teas replace the Chinese tea portion with teas from another country. One example of our blended tea is our Paris. Paris is a lovely tea that is a blend of black teas. It highlights flavors of vanilla & bergamot & is sourced from various countries including China. This blend may lose its Chinese tea portion. We have to wait and see how our suppliers react to the tariffs. They may simply continue to use Chinese tea or may swap it out with another non-Chinese tea.
What we are certain of is that Chinese tea prices will increase unless the tariffs are rescinded.
Not only will see more teas sourced from outside of China but also, we will see other countries re-engineering the tea making process. For example, China has already created its version of Sencha which is a Japanese tea making process. So tea styles that are associated with the Chinese like Ooolong, White teas (Silver Needles) or Lapsang Souchong may be re-engineered by other countries to offer a less expensive alternative to the authentic Chinese sourced versions of these teas styles.
We also will see traditionally grown Chinese teas, such as Dragon Well, being mislabeled and being sold as Chinese. This happens with Darjeeling tea which originates from India but less expensive tea from nearby Nepal is often substituted and sold as Darjeeling tea with Darjeeling's premium prices. We can expect to see nearby, less expensive Vietnamese teas being substituted as "Chinese origin". Unscrupulous tea traders will definitely be doing this as they already do with Darjeeling tea.
It is difficult to truly know whats going to happen exactly in these next coming months in the tea world but due to this tariff we can expect a boost in other countries' tea production, an increase in price of tea and tea ware as this is produced in China, and a decrease in farming in China. China is becoming more & more technologically advanced & the younger generations are abandoning farming.
We will keep you informed on future developments. If you have any questions, please list them in the comments below. We hope this post was informative for you all & that you have a wonderful & relaxing weekend! Stay warm & dry! - Kaytea :)
I’m Rob OBrien. I’m the owner of Good Life Tea. Thanks for your comment.
When this article was written, things were not 100% clear. If the teas are blended in Canada with Chinese tea, when entering the US, these may get the full tariff as if they are 100% Chinese. This is unfortunate.
However if the blender is in the US and creates a blend of partially of Chinese tea, the full impact of the tariff may not be applied.
I hope this clarifies things.
Hi Katie, will you help me to better understand your comment “Many of our teas are blends which include Chinese grown teas. These blends are created in Canada and the USA. The tariff will be lower on these blended teas as they include smaller amounts of Chinese tea.” I was told that US Customs and Border Control will charge the tariff (current 15%) on the entire volume/price of the tea. Since customs cannot discern the precise amount if it contains the slightest amount of Chinese tea it will be taxed as Chinese origin. Do you have a legal opinion that suggests otherwise? I do not. Dan
Very interesting read. Thanks for sharing, Kaytea!!