Hello everyone,
This is Andy, a tea enthusiast.
On November 14, 2025, the White House officially announced that tea is excluded from the list of reciprocal tariffs and will not be subject to additional duties.
Official announcement:
This is encouraging news for the Taiwanese tea industry.
However, in today’s increasingly strict and complex global trade environment,
tariff exemptions alone are not enough to ensure smooth export procedures.
Exporters must understand several key concepts related to tea and tariffs,
including HS Codes, rules of origin, and the risks of third-country transshipment.
Let’s go through them one by one.
1. What Is an HS Code, and Why Is It Important for Tea Exports?
The HS Code (Harmonized System) is a globally standardized product classification system developed by the World Customs Organization (WCO). It determines tariff rates, import/export regulations, and how origin is defined.
Structure of the HS Code:
- Chapter: first 2 digits
- Heading: first 4 digits
- Subheading: first 6 digits (globally harmonized)
- After 6 digits, countries may extend the code to 8 or 10 digits for their own customs and statistical use
In short: the HS Code directly affects the tariff rate and regulatory requirements of a product in each country.
2. What Is the HS Code for Tea?
Tea falls under Chapter 09 (Coffee, tea, maté and spices). Specific tea codes include:
- Green tea: 0902.10, 0902.20
- Oolong and black tea (semi- or fully fermented): 0902.30, 0902.40
- Flavored tea or tea bags: 2101.20
Most Taiwanese loose-leaf teas for export are classified under 0902.
This category is critical for determining tariffs, customs inspections, and origin verification.
3. What Should You Be Aware of When Exporting to the U.S.?
Even though tea is exempt from reciprocal tariffs, exporters must not become complacent.
In the U.S., the key concern in tea import inspections is not the price but the country of origin.
Under the U.S. Customs and Border Protection (CBP) system, the first question in determining duty status is:
Where is the product originally from?
If the origin is unclear or suspected of third-country routing,
CBP will initiate verification. Without proper documentation, even tax-exempt goods may face:
- Clearance delays
- Additional duties
- Shipment rejections or returns
4. What Is "Substantial Transformation" and Why Does It Affect Origin?
A core concept in determining origin is Substantial Transformation whether a product has been processed in a way that makes it fundamentally different.
Global standards vary:
- Some countries require a change at the chapter level
- Others at the heading level
- Some use the stricter CTSH standard (Change in Tariff Subheading)
If the HS Code doesn't change according to a country’s standard,
the processing location cannot be considered the new country of origin.
The U.S. takes a unique approach, it goes beyond the HS Code and considers whether the processing has changed the product's:
- Name
- Character
- Use
If none of these change, it is not considered substantially transformed.
5. The Real Country of Origin Is Where Core Value Is Added
The origin of a product is not where it is packed or shipped from, but where its core value is created.
Take an industrial example:
- Key components are made in Japan
- Cut and assembled in Thailand
- Exported to the U.S.
Despite the final step in Thailand, the U.S. would still consider Japan as the country of origin because:
- The core technical value
- The essential characteristics
- The main functionality
All originate from Japan, not from Thailand.
The same principle applies to tea.
6. In the Case of Tea: Why the Harvest Location Usually Determines Origin
Tea is an agricultural product and is generally treated as "wholly obtained", meaning the harvest location is the country of origin.
For example, loose-leaf oolong and black teas remain Taiwanese in origin, even if blended, packaged, or repacked elsewhere.
However, the degree of processing matters:
- Tea bags: Cutting, portioning, and sealing do not change the product’s name, character, or use. The origin remains the harvest location.
- Tea extract, ready-to-drink (RTD) teas, bottled beverages: These are considered fundamentally different products, with new names,
characteristics, and uses. Under U.S. rules, their origin may shift to the country where the major processing occurred.
Thus, while tea origin is often stable, deep processing especially into beverages can change the country of origin.
7. What Happens If You Re-export Tea to the U.S. via a Third Country?
Third-country transshipment (e.g., shipping through Vietnam,
Thailand, or Singapore before entering the U.S.) is a red flag for U.S. Customs.
If CBP suspects origin masking, they will require:
- Harvest documentation
- Processing records
- Packaging logs
- Factory information
- Traceability data for raw materials
Failure to provide sufficient information may result in:
- Inspection delays
- Duty charges
- Importer blacklisting
- Return of shipment
In short: a transparent supply chain and solid origin proof are more important than duty-free status.
8. Transparent Origin Is Taiwan Tea’s Strongest Advantage
The exemption of U.S. tariffs on tea gives Taiwanese tea a competitive edge.
But in today’s fast-changing global trade climate, more important than tariff rates are:
- Clear origin documentation
- Complete production records
- Avoiding third-country routing
- Ensuring traceability
Taiwan’s tea industry is valued for its transparency, safety,
and quality. With these strengths in place, it can approach international markets with confidence and resilience.
That’s all for now.
I hope this was helpful.
See you next time.
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