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Tea Shipments from China Face Difficult Tariff Deadline
By Dan Bolton
Reducing unprecedentedly high US tariffs for 90 days is sufficient to resume tea shipments from China, but it remains unclear when bulk deliveries of early harvest teas will arrive.
US Trade Representative (USTR) Jamieson Greer announced on May 12 that the US tariff on Chinese goods would be reduced by 115% to 30%. China also agreed to lower its rate by 115% from 125% to 10%.
The two sides canceled 91% of tariffs on each other’s goods and suspended another 24% for 90 days starting May 14. During that time, US importers receiving Chinese tea will pay 37.5% duties (reduced from 152.5% for tea).
Tariffs on shipments valued at $800 or less, sent via postal services, will be reduced to 54%, with an option to pay a flat fee of $100 per item. An increase in the flat fee to $200 per item has been canceled.
Treasury Secretary Scott Bessent said, “The consensus from both delegations is neither side wants a decoupling.”
However, every U.S. trading partner faces a July 9 deadline when reciprocal tariffs ranging from 20% to 50% will be enforced. President Trump suspended reciprocal tariffs on April 9. Negotiations continue with Vietnam, Japan, India, Sri Lanka, and several other tea-producing countries targeted for high reciprocal rates, according to USTR. The UK has agreed to an undisclosed lower rate, and India may soon agree to waive tariffs.
Click to see the complete list of reciprocal tariffs by country.
Importers seeking to avoid punitive reciprocal rates must land containers within the next 10 weeks. Tea still at sea on July 9 is subject to tariffs increasing from 10% to 50%. Major tea trading partners include Vietnam (46% reciprocal tariff), Sri Lanka (44%), Bangladesh (37%), Switzerland (31%), India (26%), South Korea (25%), and Japan (24%). Kenya is no longer listed. Countries in the European Union will pay 20%.
Light-volume first-harvest teas often travel by air, while second-flush teas from China, India, Sri Lanka, Japan, and Korea are shipped in bulk. The total time from harvest to departure is approximately 4 to 7 weeks.
See the typical timeline.
| Tea Harvest Stage | Duration (Typical Range) |
|---|---|
| Harvest | 3–6 weeks |
| Processing | 1–5 days |
| Grading/Packing | 7–10 days |
| Inland Transport to Port | 1–7 days |
| Container Booking to Sailing | 7–14 days |
Importers anticipated rising tariffs and stepped up orders in November. A massive surge was later evident as the Trump Administration announced rates for tea that increased from 7.5% in January to 37.5% in February and 152.5% in April.
First quarter totals compiled for USDA’s GATS dataset indicate that the total volume of tea imported from China increased by 55.6% compared to the same period in 2024. The average price for imports declined by 22.3% to $4.28, primarily because most of the tea in stock was harvested in 2024. The tea that was most in demand was Chinese green tea. Imports rose 70% year-over-year, accounting for 41% of the year-to-date volume.
Badly Timed Sailing Cancellations
Transit time from China and Vietnam to U.S. ports on the West Coast ranges from 15 to 25 days. The lead time for bookings is 7 to 14 days before sailings, which typically depart weekly or biweekly from major ports.
In early May, around 29% of sailings between China and the US West Coast were canceled, leading to a 70% reduction in capacity. Ten blank sailings took place in the last week of April, cutting capacity by 28%, with more anticipated from May 12 to 18.
Carriers who switched to smaller vessels and suspended routes last week are preparing for a massive influx of shipments.
Flexport writes, “In light of the 90-day US-China trade agreement, demand from China to the US is expected to surge. Given existing backlogs and the lead-up to peak season, we’ll likely see a major surge in shipping volumes.”
BIZ INSIGHT – The immediate impact:
- Trade flows will shift due to the wide variance in reciprocal tariffs. East African suppliers, for example, face 10% duties while Vietnamese coffee and tea producers face 49% tariffs.
- Prices are going up. Tariffs will significantly increase the cost of processed tea. US consumers will experience inflationary spikes as wholesalers and retailers cannot absorb the additional tax.
- Independent and small specialty tea retailers are susceptible to price fluctuations and are rightfully concerned that price-sensitive consumers will seek out botanicals and cheaper tea alternatives.
- Revised 5/18
Episode 216
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