U.S. milk tea brands are feeling the heat as rising tariffs on tea imports—especially from China—drive up costs and strain supply chains.
With a 145% reciprocal tariff on Chinese imports and increased fees across key tea-exporting nations like India, Japan, and Sri Lanka, milk tea shops are scrambling to adapt.
China alone accounted for over $21 million in U.S. instant tea imports last year. But the new tariffs are forcing milk tea companies to either absorb unsustainable costs or pass them on to customers.
Brands like The Tea Spot report tariff-related expenses now consume up to 25% of cash reserves.
Many are rethinking operations: stockpiling tea before price hikes, reducing SKUs, delaying restocks, and resizing packaging.
Popular ingredients like jasmine pearls, matcha, and oolong teas have been hit the hardest, making premium milk tea harder to deliver without raising prices.
Still, brands are doing their best to stay transparent. “These changes aren’t coming from us,” one founder noted. “We’re just trying to keep the drinks our customers love on the menu.”
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