A Comprehensive Recap on Tariffs & Their Impact on Promo Companies
The Promo Insiders team sums up the blitz of tariff news and how suppliers and distributors are trying to adapt.
“It’s been a very wild news cycle. I’ve been in journalism for almost 20 years, and it’s one of the more wild ones I’ve seen.”
That’s ASI Media Executive Editor Christopher Ruvo commenting on the pace of news that’s kicked into hyperdrive since President Donald Trump took office for his second term and issued a flurry of executive orders. One particularly crucial topic to promo companies that has been changing by the day and seemingly the hour? Tariffs.
Since the start of February, the president announced additional tariffs against China, implemented tariffs against Mexico and Canada (and then suspended them), increased levies on steel and aluminum and cracked down – but then temporarily relented – on low-value shipments coming in from China. The president has also ordered a study that will be focused on placing “reciprocal tariffs” on countries that have their own levies on imported U.S. goods.
The speed of the announcements has left promo companies scrambling to determine just what the impact of the levies and related actions will be – and how to adjust things like pricing.
In this episode of Promo Insiders, Ruvo and ASI Media Editor-in-Chief C.J. Mittica provide an overview of the latest tariffs. They discuss what both suppliers and distributors are saying and doing in response. They also examine if additional tariffs are coming and how the promo industry can adapt in the long run.
Key Takeaways
• Rapid Changes & Uncertainty: The Trump administration’s series of tariff announcements has created significant uncertainty for promotional products companies.
• China Tariffs: An additional 10% tariff has been imposed on Chinese goods, on top of existing tariffs. This affects the cost of importing products from China, which is where the vast majority of promotional products sold in the U.S. are sourced from.
• Mexico & Canada Tariffs: Initially, a 25% tariff was imposed on imports from Mexico and Canada, but it was suspended for a month on Feb. 4. The tariffs could still go into effect if the Trump administration is not satisfied with the actions of these countries regarding drug control and illegal immigration.
• Steel & Aluminum Tariffs: Tariffs on aluminum imports have increased from 10% to 25%, and exemptions on steel tariffs for select countries have been removed. It remains to be seen if finished products featuring these materials will be subject to the tariffs.
• De Minimis Exemption in Flux: The de minimis exemption allows low-value shipments (under $800) to enter the U.S. duty-free. The Trump administration attempted to eliminate this exemption for China, Canada and Mexico but has suspended the order due to practical challenges, at least for now.
• Supplier Responses: Suppliers are anticipating price increases as a result of the tariffs due to the higher costs of importing goods. Some may sell existing stock at current prices but will likely raise prices on new imports subject to tariffs, should the levies remain in place.
• Distributor Strategies: Distributors are taking varied approaches, with some proactively communicating with clients, while others are taking a wait-and-see stance.
• Long-Term Sourcing Considerations: The promo industry has been exploring new sourcing countries for years, but certain products, especially hard goods, may still need to be sourced from China due to its manufacturing capabilities.
• Possibility of Reciprocal Tariffs: On Feb. 13, Trump ordered a study of how U.S. tariff rates could be adjusted to match current levies and trade barriers that other countries place on American exports to those nations. This analysis on potential reciprocal tariffs could conclude within 180 days. If implemented, what some have described as “tit-for-tat” levies could make importing products from a broad swath of nations more expensive and potentially have “ripple effects” that dampen promo spend, some industry executives fear.