The Tea Act of 1773  allowed the East India Tea company to bypass duties paid in England and sell tea to the American colonies. The company was allowed to collect the Townshend Duty which, although it was removed in 1771, was still imposed upon tea. The tea undercut many colonial smugglers and merchants. Although the tea itself was cheaper, the American colonists were angered as they believed they were being underhandedly taxed by the British government. In 1773, the colonies spent £3.4 million on tea and 90% of the product was still smuggled illegally.

During the Boston Tea Party of 1773, local Sons of Liberty groups, organised by Samuel Adams wearing Native American garments, stormed the ships carrying the East Indian Tea Company tea. Dockworkers refused to unload the tea. 342 chests of tea were thrown overboard which angered the British government leading to the creation of the Coercive Acts which punished the colony of Boston for the losses incurred by the East India Tea Company.