By: Staff Writer
April 20, Colombo (LNW): The Tea Exporters Association (TEA) of Sri Lanka has voiced serious concern over the recent imposition of reciprocal tariffs by the United States, warning of significant negative impacts on the country’s tea exports. The US, one of the world’s largest tea importers, brought in over $500 million worth of tea in 2024, and Sri Lanka plays a prominent role in its hot tea market segment, accounting for 20% of the share.
In 2024, Sri Lanka exported 6.4 million kilograms of tea to the US, valued at $45 million—a 22% increase in volume and 11% in value compared to the previous year. Notably, 65% of these exports were in value-added forms such as tea bags, packets, and instant tea, with an average Free on Board (FOB) price of $7 per kilogram, well above the national average of $5.83.
However, the introduction of US tariffs has disrupted this growth. As of April 11, 2025, around 296,000 kg of Sri Lankan tea worth $3.24 million was en route to the US, while an additional 21,000 kg, valued at nearly $480,000, awaited clearance at US ports. Following the tariff announcement, confirmed orders totaling 226,000 kg and valued at $3.14 million were suspended by US buyers. Although some orders are now being restored and US importers are clearing shipments by paying the 10% duty, exporters remain anxious about the long-term outlook.
Sri Lanka competes with tea-producing nations like India, Kenya, and Vietnam in the US market. The 90-day grace period currently in place has brought temporary relief. However, if the tariffs are not revoked, the higher 44% duty on Sri Lankan tea—compared to 26% on Indian and 10% on Kenyan tea—could cause buyers to shift to these competitors, threatening Sri Lanka’s market share.
This situation poses a serious threat to the nation’s tea industry, especially given that 4 million kg of value-added tea may not find an alternative market quickly. A decline in US orders would undermine Sri Lanka’s 2025 tea export revenue target of $1.5 billion and negatively affect incomes of thousands of producers, including smallholder farmers.
In light of these challenges, the TEA is urging the US to consider the socio-economic importance of the tea sector. With over 2 million Sri Lankans directly dependent on tea export income, and considering tea as a globally essential commodity, TEA appeals for either the lowest possible or tariff-free access to the US market to safeguard livelihoods and sustain growth.
