“Uncertainty.”

Talk to executives in the promotional products industry about the U.S./China trade war, and that word comes up time and again. Indeed, the tremendous uncertainty about what will happen with tariffs on Chinese imports – and when – has made it increasingly difficult to plan. That uncertainty applies to providing longer-term quotes and planning on product pricing – not a surprise for an industry that imports the majority of the items it sells domestically from China.

Jonathan Isaacson, president, Gemline

Against that backdrop, however, Top 40 promo product supplier Gemline (asi/56070) has launched an initiative to introduce some certainty. The Massachusetts-based firm has placed hundreds of its products into a “Price Lock Product Zone” – guaranteeing that pricing will not increase on the items through the end of 2019. Products include everything from totes and tumblers to Bluetooth headphones and speakers, backpacks, coolers and more.

“By shopping with Gemline in the Price Lock Product Zone, distributors can be assured that, whatever happens with the tariffs for the remainder of the year, they can continue to sell with confidence,” Gemline President Jonathan Isaacson told Counselor. “Our price lock includes many products from our brand partners, including Moleskine, Samsonite and Zebra. In fact, we believe that we will be able to hold pricing on virtually the entire line through the end of the year, although price lock items are guaranteed.”

The 10 oz. Celeste Bamboo Ceramic Bottle is one of hundreds of products in Gemline’s Price Lock Product Zone.

Isaacson told Counselor that Gemline’s strong, diverse supply chain – which has included operations in Asia since the 1960s – has uniquely positioned the company to be able offer pricing stability amid the China tariff tumult. “We’ve developed a robust supply chain that we support through a large technical center staffed by Gemline employees,” said Isaacson. “And, as a company who designs and engineers our product line, versus those that simply buy something off the shelf, we control the process up to and including the raw materials. This is extremely valuable at times like these.”

Top negotiators for the U.S. and China are scheduled to meet in Washington D.C. in early October to discuss a potential new trade deal between the world’s two largest national economies. Given the current rhetoric from both sides, Isaacson feels there is only about a 30% chance that a comprehensive trade deal is ultimately inked.

Continued hostilities are likely to cause impacts on promo, according to Isaacson: “From a supplier standpoint, it’s going to make it harder for those without a deep footprint, including their own staff on the ground, to be able to respond. In addition, this certainly increases the compliance risk as companies who do not have the appropriate controls try to move production beyond China to avoid tariffs. … This all adds a degree of complexity and volatility in the short term, as we all adjust to the situation. Still, longer term, this will settle down, and we’ll find a way to sell through the current situation.”

With reported 2018 North American promotional product revenue of $104 million, Gemline ranks 15th on Counselor’s latest list of the largest suppliers in the industry.