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.
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.
