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The boss of upmarket retailer Fortnum & Mason has said Donald Trump’s trade war has hit sales of its luxury tea exports to the US and forced up prices.
Tom Athron, the London-based retailer’s chief executive, said Trump’s stricter country of origin rules and the end of the “de minimis” cost exemption for parcels worth less than $800 (£587) had hit customers across the Atlantic.
“The American authorities have told us – this is the tea industry in its entirety – that if you’ve got tea from China and India in your tea, then its country of origin [is] China or India, and therefore those enormous tariffs apply,” he told the Financial Times.
Trump, who landed in the UK on Tuesday for an unprecedented second state visit for a US president, last month imposed a 50% tariff on imports from India as a punishment for buying Russian oil.
And earlier this year, the US administration raised tariffs as high as 145% on Chinese goods as the trade war intensified, before dropping them to 30% in May to facilitate talks between the two trading giants. The world’s two largest economies held talks in Madrid this week to try to reach a potential deal.
For a 250g canister of loose leaf Royal Blend tea, which retails to US consumers at $27.85, Fortnum’s has now been forced to charge delivery fees starting at $25.41 owing to the changes to US taxes and duties.
The 318-year-old retailer, which holds two royal warrants, was not previously liable for any tariffs on the majority of its deliveries to US customers.
US custom agents assess whether a “substantive transformation” has been made to a product to decide whether its country of origin is different from where the product has been sourced.
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This process can be unclear to retailers, while the scrapping of “de miminis” rules has led to customers being wary of buying Fortnum & Mason’s products, which are popular with expats and international buyers.
“A lot of our things are sent as gifts [so] if you’re living in New York and I’m sending a present to you, I want to be sure that you’re not going to be landed with a $200 bill on receipt of your parcel,” said Athron. “It’s all in hand, logistically we’re immaculate, it just means prices will go up for US consumers.”
Overseas sales of Fortnum & Mason’s goods, including its famous hampers, were £12.5m in the year to July 2024, accounting for about 5.5% of total revenues.
Wider inflationary pressure has led the retailer to raise the UK price of a 250g canister of loose leaf Breakfast Blend tea by almost 40% over the last five years.
