The rapidly developing tariff situation has caused a great deal of uncertainty for businesses across the globe.
Here’s the latest: President Donald Trump has placed an additional 10% tariff on imports coming from China, which quickly led to Beijing announcing retaliatory tariffs.
Trump also announced 25% tariffs on Canadian and Mexican imports, only to put a one-month pause on the plan following meetings with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum.
- He has also announced an end to the “de minimis” exemption that has allowed packages worth less than $800 to enter the U.S. without having to pay a tariff or duty.
PPAI, working closely with our lobbyists at Thorn Run Partners, will send a letter to top congressional leaders this week urging them to work toward a balanced trade policy that protects American interests while ensuring that American businesses, such as those in the promotional products industry, are not disproportionately burdened.
- We will provide the text of that letter via PPAI Media so you can use it as a template to send your own letters to your representative and senators.
- Every year, PPAI members and staff travel to Capitol Hill to advocate for the promotional products industry, and tariff concerns will be one of the key issues we will be discussing with members of Congress in April. (Learn more about LEAD here.)
“Should these tariffs escalate and cause negative financial ramifications, we are a proven, resilient industry that always finds innovative ways to bounce back bigger and better than ever,” says Drew Holmgreen, president and CEO of PPAI.
Drew Holmgreen
President & CEO, PPAI
Below are actions and strategies that promo firms should implement immediately.
Stay Informed and Assess Business Impact
- Identify affected products: Determine which SKUs sourced from Canada, Mexico or China will see cost increases due to tariffs.
- Analyze financial impact: Work with finance and procurement teams to assess how tariffs will affect pricing, profitability and customer contracts.
- Monitor government actions and advocacy efforts: Follow PPAI’s updates on trade policy changes, potential exemptions and tariff negotiations.
RELATED: ‘Nothing Is Secure:’ Promo Reacts To Tariff Roller Coaster
Optimize Supply Chain and Sourcing Strategies
- Diversify sourcing: Explore alternative production locations in North America or other international markets to reduce exposure to tariffs.
- Negotiate supplier terms: Discuss pricing flexibility, bulk purchasing and extended payment terms to help offset cost increases.
- Consider domestic production: Where feasible, invest in U.S.-based manufacturing to reduce reliance on imported goods subject to tariffs.
Manage Pricing and Customer Expectations
- Stabilize pricing when possible: Before adjusting pricing, exhaust all cost-saving measures, such as logistics optimization, supplier negotiations and bulk purchasing.
- Educate customers and end-buyers: Be transparent about tariff-related cost changes and provide alternative product recommendations when necessary.
- Offer strategic pricing incentives: Consider bulk purchase discounts, long-term pricing contracts or early order incentives to help customers mitigate cost volatility.
Advocate for Relief and Engage with Policymakers
- Support PPAI’s advocacy efforts: Participate in ongoing lobbying initiatives focused on tariff relief and exemptions for the promotional products industry.
- Share your business impact story: Contribute to PPAI’s tariff impact survey to help strengthen the industry’s case for exemptions or policy adjustments.
Plan for Long-Term Market Shifts
- Anticipate further trade disruptions: With ongoing U.S.-China trade tensions and potential EU tariff actions, businesses should remain agile in supply chain planning.
- Invest in operational efficiencies: Explore automation, streamlined logistics and technology improvements to drive cost savings and business resilience.
- Evaluate alternative global markets: Expand partnerships with suppliers outside tariff-affected regions to reduce dependency on impacted supply chains.
Be Proactive, Not Reactive
Distributors and suppliers can’t afford to wait for policy shifts.
By staying informed, optimizing supply chains, maintaining customer trust and engaging in advocacy, businesses can navigate the impact of tariffs effectively while ensuring long-term resilience in the promo industry.
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.