Tea Shockwave: US Slams Sri Lanka with 44% Tariff Bombshell

Sri Lanka's tea industry is grappling with the consequences of a sudden tariff hike imposed by the United States, raising duties from 0% to a staggering 44%. This move, effective April 2025, targets all tea exports to the US, which previously enjoyed tariff-free status. The US market accounted for 6.4 million kilograms of Sri Lankan tea exports in 2024, generating approximately $45 million in revenue. With the new tariff, industry experts fear a significant decline in demand, particularly for high and mid-grown teas that dominate exports to the US.

The tariff hike is part of a broader trade policy shift by the US, aimed at addressing trade imbalances. Sri Lanka now faces one of the highest tariff rates among tea-exporting nations, threatening its competitive edge in the global market. Industry stakeholders are exploring alternative markets and strategies to mitigate the impact, while diplomatic efforts are underway to negotiate relief.
The sudden tariff increase underscores the vulnerability of Sri Lanka's tea industry to global trade dynamics.

Source: Daily FT