“No….No. No.”
The first ‘no’ was followed by a brief pause. Then, after only a second of reflection, Kathy Cheng, founder and president of Redwood Classics Apparel in Toronto, said “no” two more times for emphasis.
She had just been asked if, at any point during President Donald Trump’s threats of tariffs on Canadian imports, did she wonder if Redwood Classics’ recent partnership with U.S.-based Vantage Apparel, PPAI 100’s No. 12 supplier, was in jeopardy.
“No. I think like any other partnership, you start off with values,” Cheng says. “I’ve had enough conversations over the years to know what I don’t want, which helps you understand what you do want in a partnership.
“Partnering with Vantage felt like home, and it continues to feel like home.”
One year ago, that might not have been a particularly noticeable statement, but tensions between Canadian and U.S. governments have risen since the recent onset of a trade war. To many in Canada, actions by Trump have brought out a Canadian pride in the wake of what they see as aggressive and unprovoked actions.
- On March 4, Trump confirmed 25% tariffs on Canada and Mexico, with certain exceptions, beginning a trade war that has led to retaliatory tariffs from the north and south of the United States.
- According to The Washington Post, the White House administration plans to impose new tariffs on April 2, while declaring the date to be “Liberation Day.”
Preceding all of this for the two suppliers was the announcement last July that Vantage Apparel would become the exclusive U.S. provider of Redwood Classics Apparel. At the time, it might have seemed unreasonable to assume a trade war between the U.S. and Canada would break out. When it did, dynamics obviously changed. But, according to both sides, the commitment to the partnership never changed.
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“We definitely had some early conversations,” says Rob Watson, CEO of Vantage Apparel.
“You’re running scenarios. Those conversations were thoughtful.”
Not only will Vantage continue to provide Redwood Classics’ line of apparel, but the two have established a plan to avoid rising costs for at least the immediate future.
“We truly do cherish this as a partnership,” Cheng says. “Even under the current uncertainties, I still feel extremely safe.”
How Are They Making It Work?
By the time the Canadian tariffs were looking like a soon-to-be reality, Vantage Apparel already had six to eight months of marketing of the Redwood Classics line under its belt. The plan was to move forward, which would require navigation.
- The decision was made to bring over a large amount of Redwood Classics inventory to the U.S.-based Vantage before the tariffs went into effect.
How much inventory? It would be impossible to predict exactly how long the pre-tariff import would last, but Vantage believed enough in the product line to bring over a significant amount.
“I would say with great confidence that when we looked at bringing in inventory, we wanted to bring in a year’s worth of inventory,” Watson says, adding that they expected sales growth for the line to be significant, factoring in increased and accumulative marketing of it. “We wanted to know that even with exponential growth, we still had a year’s worth of inventory that we could sell confidently.”
An investment that large requires the necessary resources, of course, but it also requires faith in the product. Perhaps even above that, it only happens if the partnership is built on a foundation of trust and like-mindedness.
Rob Watson
CEO, Vantage Apparel
“[The partnership] was really about two organizations – one from America and one from Canada – uniting because we had a shared vision about quality, sustainability, good practices and care for the people within our organization,” Watson says.
That shared vision, according to Cheng, is not something that can be realized immediately with two companies that have similar plans. After all, the two firms and their leaders have operated separately over time and established their own reputations.
“Vantage has been around for a number of decades and our factory has been around for nearly 40 years,” Cheng says.
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From a certain perspective, a lot hinged on that investment and its success. Beyond the two suppliers, there are the distributors who, amid the current uncertainty of tariffs, have a partner that remains viable.
“For a lot of distributors, there is plenty of infrastructure of revenue that’s generated from cyclical business,” Watson says. “These programs generate 30%-40% of revenue for a lot of distributors. In order for the distributor to stay healthy and to stay strong, they need to know that that the suppliers that they’re partnering with are doing everything that they can to keep consistency with the pricing, as much as they can.
“If we could lean into more inventory and ensure that Redwood styles, in addition to Vantage styles, could be a solution for these distributors all throughout 2025 without seeing a lot of adjustment, then we’re better for it.”
The Luck Of Proximity
Once the commitment between the two suppliers was reestablished, they acted fast. Watson acknowledges the good fortune of Redwood Classics’ factory being relatively close to the New Jersey-based Vantage Apparel.
“Make no mistake, we are lucky that we are partners that are a couple hours away from each other,” Watson says. “Our situation is unique, as a U.S. supplier that has a wonderful partner that can send product to me lightning fast.”
- He added that Vantage has partners in which such actions would be untenable, requiring four to six months for such a significant shipment.
Both leaders reiterated that they are not sharing a secret formula that other businesses have not considered. But with the industry having made it out the other side of uncertain events like the pandemic, they advocate for companies to share successes, failures and strategies to avoid the upending of industry growth. Often labeled a “relationship industry,” these are the moments those relationships are pivotal.
Kathy Cheng
President, Redwood Classics Apparel
“It’s about keeping the lines of communication wide open and constantly being able to share,” Cheng says. “It’s OK to be vulnerable. You don’t always have to be winning.
“There are so many lessons to be had when there are failures. We’re far from perfect.”
A Hypothetical Phase 2….Replenishment
A year’s inventory is a lot. But no matter what, you eventually reach the end point. If importing advanced inventory was Phase 1, then Phase 2 would be about replenishment, Watson says.
- Of course, the significance of that phase could be a moot point if these tariffs prove to be temporary. However, there is little evidence at this exact moment in time to suggest the tariffs have a specific expiration date.
- If the tariffs remain intact when Vantage’s inventory of Redwood Classics runs out, then Watson says that the entire promo “ecosystem” will have to look for creative ways to reduce costs so that a price increase wouldn’t be dramatic. Many promo companies are already in this position.
“If there are some impositions of price increases over time, then I think that it’s a shared experiment between the supplier and the distributor,” Watson says. “The goal right now is to push off as much change as possible because there is so much uncertainty.”
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In that uncertain future, both leaders worry about the overall economy affecting consumers and the spend they are willing to spend on promotional products. But as things stand, the two suppliers remain one of what will likely prove to be many promo companies superseding government tensions.
“It’s really helpful, for Redwood at least, in knowing that we have a partner that is as committed as we are,” Cheng says.
‘Thoughtful Approach’
PPAI has long supported free trade.
Serving members of all political stripes, the Association recognizes the need for policies that strengthen the U.S. economy and support domestic manufacturing. However, any measures – including tariffs – must be implemented strategically to minimize short-term economic disruption while setting the stage for long-term growth. Abrupt cost increases impact businesses of all sizes, from small distributors to global suppliers, ultimately affecting jobs, investment and product pricing throughout our industry.
Drew Holmgreen
President/CEO, PPAI
“We advocate for a thoughtful approach – one that balances economic goals with the realities of supply chain dynamics,” says Drew Holmgreen, president and CEO of PPAI. “With support from our lobbying partners in Washington, we are in ongoing conversations with industry volunteers, trade groups and policymakers with the goal to ensure that any trade policies consider the full scope of their impact and allow businesses time to adapt.”
- Every year, PPAI members and staff travel to Capitol Hill to advocate for the promotional products industry as part of PPAI’s Legislative Education and Action Day.
- Tariff concerns will be one of the key issues we’ll be discussing with members of Congress on April 7-8. (Learn more about LEAD here.)
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
