Tariffs on tea from China were a holdover from President Trump’s administration and continued under President Biden. Now that Trump is back in the office, we continue to advocate for removal of tariffs on Chinese tea and to fighting all proposed tariffs.  However, this is clearly not on this Administration’s agenda.  For those not certain about how tariffs work, here is short primer:

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Tariffs are taxes on goods traded between nations. They’re a way for countries to control international trade by artificially raising the cost of importing goods. Some tariffs can incentivize would-be importers to purchase from domestic sellers instead, potentially strengthening the local economy. The US adjusts tariffs based on trade agreements, political goals, and economic needs.

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• The US collected $77 billion in tariffs in 2024, making up 1.6% of federal revenue. Tariffs haven’t comprised more than 2.0% of total annual revenue since the 1960s. 

• Congress holds constitutional authority over tariffs but has delegated much of it to the president through legislation. Customs and Border Protection enforces tariff collections based on the type of goods, quantity, and country they come from. 

• As of October 2024, the average tariff rate for bringing goods into the US is 3.4%. However, it varies based on the product, cost, quantity, and relationship with the exporting country. 

• The US follows World Trade Organization rules that standardize tariffs across member nations, but 14 free trade agreements and special exceptions allow for lower rates with specific partners. 

• When the US raises tariffs, US companies importing international goods pay those tariffs. This can indirectly raise prices for American consumers.

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Tea & Health

Thousands of published scientific journals continue to document tea’s ability to positively impact human health. Whether interfering with cancer mechanisms, enhancing heart health, slowing neurological decline, positively impacting weight management and preventing diabetes or improving bone health and, lastly, boosting immune functionality, tea is good for you and tastes great! 

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Tea contains high levels of bio-actives, in particular, Flavan-3-ols, an emerging class of compounds generating great interest as promoters of human health. Tea has also become an important addition in the discussions around health Equity.  Tea can be an important component in reaching underserved populations as a healthy beverage that can be seen to help mitigate the high rates of heart disease, type 2 diabetes and obesity in this population. 

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The Dietary Guidelines are due for updating and publication in 2025.  The Tea Association of the U.S.A, Inc., has submitted several written comments and video comments supporting enhanced inclusion of  tea in this important government publication that recommends dietary choices.

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Under the new FDA Rule regarding the definition of “Healthy”, tea was included.  This is a tremendous success for the industry and allows the word “Healthy” to be used on front of pack and the “Healthy” word can be included in communicating about the product.  

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Unfortunately, these successful efforts are now being impeded by the Trump Administration’s Executive Orders as they cut jobs, freeze budgets and potentially stop research that conflicts with their view on what is “right”, not what is the right science.

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Issues Addressed

Plastic in Tea Bags continues to be an issue.  Several flawed studies continue to make the “media rounds”, purportedly highlighting the amount of micro and nano plastics.  We acted quickly to develop a response document that highlighted flaws in the studies and sent specific responses to key publishers. 

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Climate change continues to be an important issue for our members. We worked with NSF and Cool Farm Alliance to develop a tool for our members that will assist in calculating their carbon footprint. This initiative was made possible due to a partnership with Tea & Herbal Association of Canada and United Kingdom Tea and Infusions Association and the tool was made freely available to all our members. 

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Our memberships in CropLife and Imports Coalition provided us with key insights into activities regarding crop chemicals and Port Labor actions.  2024 had its share of threatened strikes and the flow of goods from our ports to customers and consumers were disrupted several times.  Currently, contract negotiations have been successfully concluded with a new contract in place.

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We continue to develop cohesive messaging on topics such as heavy metals; HTIS classifications and modifications; Prop 65 actions; sustainability issues, nano-plastics in tea bags, PFAS (perfluorinated compounds) as well as Global  FAO issues on behalf of our members.

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Working with the Tea Council, we effectively communicated our positions on behalf of the industry in the areas of tariffs, labeling (country of origin and nutritional), Dietary Guidelines, Healthy definition for tea and port congestion issues.  Support and defense of the tea industry continues to be our primary our mission.

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Markets

Foodservice gains some; Specialty Tea continues growth; RTD improves dollar sales; Traditional/Grocery continues slowly decline in volume.

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Specialty Tea continues its rise in both pounds and dollars. Millennials and Gen Z’s lead the way for all consumers across all demographics as they continue to consume tea for its variety of origins, types and flavors.  Tea generates interest across origins, terroirs, flavors. Tea drinkers are interested in bush to brand stories and tea’s sustainability, particularly in the market of these high quality, higher priced teas.  Artisanal teas remain of high interest and continue to grow at a fast clip. Consumers’ engagement remain strong and they want to learn more and more about where their teas come from; how they are harvested and manufactured; how the product supports the livelihoods of those making it; and, how friendly the product is to the environment.  Specialty tea buyers, in particular, seek to engage with their products of choice.  

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Ready-to-drink (RTD) tea category continued its dollar growth but volume was a challenge in 2023.  Estimates are that 2023 exhibited circa 6%-7% growth in dollars, but a decline of some and -2%-3% in  gallonage. Challenges for RTD remain clear:  return to volume growth while competing with products across other categories, e.g., health, refreshment and hydration.  Separation and segmentation between premium, high quality RTD’s and the value, CSD replacement segment continues, with the premium segment leading growth.

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Traditional tea (Grocery/DMM (Drug/Mass Merchandisers) continued the fight to maintain the gains from 2020 through 2023.  Communication to consumers through traditional media and social media continued at higher levels vs. pre-COVID.  The apparent improvement in their bottom lines have allowed for a continued re-investment in their brands. 

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We are continuously challenged to educate consumers about key differences between true teas (Camellia sinensis) from herbals and other botanicals, neither of which have the same level of bio-actives, anti-oxidants or overall Healthful qualities. Our messaging across all forms of tea through our social media initiatives highlight the benefits of “true tea” and should be amplified by all tea companies.

Internationally, producer countries should continue to protect and advertise their teas through geographic designations and by trademarking their unique terroirs. The pursuit of a wine-like appellation marketing and protection serves to differentiate one region from another as well as proactively communicate to the consumer the benefits of geography, elevation and climate as key ingredients to tea quality.

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Markets:

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Each year we try to estimate the size and growth of the various tea markets.  We derive many of these estimates qualitatively with some quantitative validation.  Further, we note that 2.9% CPI for food inflation in 2024  represents a substantial reduction from 2023’s 3.4%.  Generally, volume was off slightly in all categories, but dollars were up, driven by inflation and price.  Please use these figures only as a guide.