As the U.S. enters a new phase of trade tensions, the milk tea industry, including beloved brands like Boba Guys, is bracing for higher costs due to President Trump’s recent tariff increases.
U.S. Boba Company, the first-ever manufacturer of boba outside Taiwan, operates a facility in Hayward, supplying cafes and eateries across the nation. However, some of its key ingredients, such as tapioca starch, are imported from countries like Thailand, which may see price hikes due to the tariffs.
Andrew Chau, founder of Boba Guys, acknowledges that while his brand sources many ingredients locally, the ripple effects of the tariff increases will still impact his operations.
“Our drinks contain everything from locally sourced dairy to fruits imported from Mexico, and even those will be subject to the tariffs,” said Chau. “Our teas, for example, are sourced from overseas.”
The tariff hikes are also expected to impact the cost of sustainable packaging, like bamboo straws imported from Taiwan.
The new tariffs, including a hefty 104% tax on Chinese goods, are part of a broader trade war that has raised concerns about economic downturns worldwide. President Trump has expressed confidence that these measures will strengthen the U.S. economy, despite the potential for rising prices across industries.
For companies like Boba Guys, which prides itself on premium, transparent ingredients, the tariffs may force price increases. Andrew Chau’s co-founder, David Fan, highlighted that these price hikes might lead some consumers to rethink their regular milk tea purchases, potentially affecting sales.
“Our business is based on bringing people joy, but rising costs could lead to customers cutting back on their regular visits,” Chau said. “If we can’t find alternative suppliers, we may have to pass the cost along.”
While Boba Guys is exploring ways to minimize the impact—such as sourcing more domestically grown produce—the uncertainty surrounding trade negotiations leaves the company in a holding pattern.
Chau remains optimistic, stating, “The key is adaptability. As entrepreneurs, we have to adapt to the changes. We hope our brand can continue being a little joy for people in such unpredictable times.”
Related topics:
