The promo world, like just about every industry affected by international trade, has had a tumultuous week.
President Donald Trump announced 25% tariffs on Canadian and Mexican imports at the beginning of February, only to put a one-month pause on the plan a few days later following meetings with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum. Amid all of that, new tariffs were put in place on Chinese imports and more, stricter international tariffs were threatened.
So, where does that leave American trade relations now?
- Trump has placed an additional 10% tariff on imports coming from China, which quickly led to Beijing announcing retaliatory tariffs.
- 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.
- The threatened 25% tariffs on Canadian and Mexican imports have been halted until March without a clearly defined criteria for what must be accomplished in that time.
Needless to say, many promo firms have been preparing, reacting, adjusting and generally wrapping their collective heads around what these possibilities might mean for their businesses and the promotional products industry at large. One Canadian supplier told PPAI Media that he had spent “20 hours a day” leading up to the pause on Canadian tariffs with business groups discussing short- and long-term implications, preparations and contingency plans.
As the week has progressed, PPAI Media has been in contact with various promo leaders to pick their brains on the current state of tariffs and their impact on the branded merchandise landscape, as well as how they are approaching the near-term future. Below are some perspectives on international trade from within the promo community.
Jim Stutz, Executive Vice President of Sales, Marketing and Business Development, HALO (PPAI 100’s No. 2 distributor)
Stutz has been guiding HALO’s account executives, sales teams and clients through tariff possibilities and realities over the past few weeks and months.
“Distributors across the industry should be exploring alternative sourcing options proactively,” Stutz says. “This strategic approach helps mitigate potential cost increases and maintains client satisfaction, turning pricing challenges into opportunities for strengthening relationships.
Jim Stutz
EVP of Sales, Marketing and Business Development, HALO
“The promotional products industry will seek out innovative solutions to lessen the impact of tariff changes. By embracing a range of tactics including boosting inventory levels and diversifying manufacturing sources beyond traditional markets, the industry will sustain operations during this global supply chain shift.”
Stutz elaborated that the industry’s strong supplier and distributer networks will be “critical in navigating these changes.”
Jose Gomez, CEO & President, Edwards Garment (PPAI 100’s No. 19 supplier)
“From similar history, we have seen that tariffs impact our industry by increasing the product cost and therefore lead to price increases,” Gomez says. “When this happened a few years ago, we heard that the hard goods side of the industry was more drastically impacted than apparel due to a higher reliance on China.
Jose Gomez
CEO & President, Edwards Garment
“Other effects that more tariffs can have are acceleration on manufacturing automation (both in current countries of origin and in the U.S.) and shifts on the promo spend by product category (if one category’s prices go up and others don’t). Although domestic production could increase, this is likely marginal in scale. The volume of promo product imported is massive and creating new production capacity takes significant investment and time to install factories, hire and train a workforce and more.”
Gomez also explained that Edwards has spent the past decade-plus diversifying its product sources, including near-shoring options, which will help it navigate current and potential tariffs. It’s currently evaluating changes it can and may need to make to minimize customer impact.
Joe Hoffman, Senior Vice President of Operations, iPROMOTEu (PPAI 100’s No. 11 distributor)
Below is taken from a document iPROMOTEu shared with PPAI Media intended for the distributor’s affiliate network. Hoffman and the iPROMOTEu leadership are keeping affiliates up to date on developments and the best course of action.
“We are monitoring developments and gathering insights from multiple sources, including our vendor community,” Hoffman says. Price increases will vary based on each supplier’s business model.
“Some suppliers may raise prices immediately, while others may absorb costs temporarily. Many U.S.-based suppliers have stocked up on inventory in anticipation of these tariffs. Price increases may not take effect until this pre-tariff inventory is depleted.”
iPROMOTEu is urging affiliates to review open orders, update pricing policies, educate customers and be ready for further changes.
Chris Anderson, CEO, HPG (PPAI 100’s No. 6 supplier)
“[Regarding additional tariffs placed on China], HPG will continue to take the long view in regard to the impact of tariffs,” Anderson says. “This includes, but is not limited to, shifting production and distribution among our existing North American facilities, adjustments to our global upstream supply chain and proactively seeking, and investing in, efficiency-driving opportunities within our entire ecosystem. Furthermore, the implementation of tariffs is often accompanied by shifts in currency valuations, which can have a partially mitigating impact on the real cost of tariffs.
Chris Anderson
CEO, HPG
“Prior to considering any possible tariff-driven increase to the selling price of our products, HPG will first exhaust any-and-all opportunities to offset the impact of tariffs. Only after all such mitigating strategies have been exhausted, will HPG break out the net impact of tariffs, and provide a transparent view of their impact on pricing.”
Regarding potential Canadian and Mexican tariffs, Anderson said that the company’s manufacturing expansion into Mexico and Canada has bolstered its preparation to withstand such North American tariffs and that Canadian distributors can “take comfort” that HPG’s Debco and BCG presence (located in Toronto and Montreal, respectively) will be able to take their orders regardless of whether the pauses on tariffs end.
Asif Bandeali, Co-CEO, Fair Deal Import & Export (Based in Ontario, Canada)
“At this point, we’ll be status quo but ready to act in 30 days if needed,” Bandeali says. “Running a business without certainty isn’t reassuring for suppliers and customers with the back and forth on tariffs.
Asif Bandeali
Co-CEO, Fair Deal Import & Export
“Our initial plan before the pause was to not increase pricing initially and see how things play out in the coming weeks and months. With an additional 10% tariff from China on U.S. suppliers, importers/suppliers in the U.S. would increase their pricing to distributors. In our case, we’d hope to increase sales to help offset the additional cost of tariffs. We’d consider implementing that plan if the tariffs return in 30 days.”
Jen Beldam, Founder & President, Northern Branding Studio (Based in Ontario, Canada)
“It’s definitely hard to plan for the future when substantial tariffs are being threatened, and then imposed, and then walked back and then delayed. It’s a bit exhausting to be honest. We’re going to take this month-long pause to act proactively in educating our clients and examining our supply chain.
“As a small firm, we’re rarely working on projects large enough to be offshored, so we need to look at what suppliers are funneling products through their warehouses in the U.S. versus who actually have warehouses in Canada. Whether the tariffs end up being canceled or not, these discussions are alerting everyone across the continent to the fact that our previously strong relationship with our neighbors could change on a daily basis. Nothing is secure.”
Jen Beldam
Founder & President, Northern Branding Studio
Beldam added that her team is also hyper conscious about having clients on both sides of the border, so they’re looking at ways to essentially limit border crossing for merchandise so that their southern clients aren’t deterred from working with a Canadian firm. “We’re just going to try and minimize friction on the international fulfillment side,” she said.
Scott Edidin, Co-founder, 6AM Sourcing
“We have been proactively managing the impact of new tariffs with our clients,” Edidin says. “For open orders in China, we are absorbing all additional tariff fees for in-house orders and have already notified our clients. We have also been working closely with our partners to anticipate any additional implications transparently.
Scott Edidin
Co-founder, 6AM Sourcing
“Beyond China, we are closely monitoring the economic shifts affecting trade with Mexico, a key part of our supplier base. We’ve quickly seen the impact that the pressure of additional tariffs has had. Our priority is to maintain open communication with our clients and support them through these adjustments as they continue to change. While the industry will experience price increases, impacting budgets and end-user spending, we anticipate a period of adjustment before the market stabilizes—much like previous tariff changes.”
Eli Schneider, Senior Director of Operations, BAMKO (PPAI 100’s No. 6 distributor)
“Simply put, the tariff situation has been very fluid as demonstrated by the temporary deal reached with Canada and Mexico hours before the 25% tariff was set to go into effect,” Schneider says. “At BAMKO, we’ve been preparing for potential tariff disruptions since 2018. So, the 10% increase announced in November wasn’t a surprise; we’d already factored it into our plans.
Eli Schneider
Senior Director of Operations, BAMKO
“China is still a big part of our supply chain, but we’ve been actively diversifying and building relationships with suppliers in other countries spanning North, Central and South America, as well as Asia. This gives us more flexibility and backup options. Nobody likes market ups and downs, but fortunately, BAMKO is built to handle them. These latest tariff announcements don’t change our long-term sourcing strategy. We’re ready to navigate whatever comes our way.”
Craig Nadel, CEO, Nadel (PPAI 100’s No. 9 distributor)
“I do think tariffs are a tax, and no industry wants to see an increases of taxes on the products or services they provide,” Nadel says. “In the case of China, the only one currently implemented, 10% should not be terrible. Twenty-five percent is a lot. If that happens, I’m sure our costs will increase. Of course, everyone in the industry will have the same issues so in that regard we won’t be worse off. It will increase our sales even if things are more expensive. However, we will all lose some business on the margin to gift cards, bottles of wine, etc. I hope they don’t happen.”
Craig Nadel
CEO, Nadel
“I don’t think it is a be-all end-all, ‘end of the world’ type of thing,” Nadel says, “but it would be a headwind for the industry.”
Kevin Walsh, President, Showdown Displays (PPAI 100’s No. 8 supplier)
Regarding Chinese tariffs already implemented:
“Tariffs are undesirable as they do equate to price increases for consumers,” Walsh says. “That said, now that businesses have more definitive direction on the scale of the increase, they can plan accordingly. I foresee those business models that leverage China as their production facility being impacted the hardest as 100% of their orders will be subject to this tariff. That’s amplified if they’ve also been leveraging de minimis shipments.
“These new tariffs, and the elimination of the de minimis exemption, represent significant cost increases (+18%) for those models. Other domestic manufacturers, like Showdown Displays, will experience the impact of an increase, but only as it relates to the imported components that comprise that item rather than the entire finished product. I’d estimate this to be in the range of 3-5% depending on the product.”
Kevin Walsh
President, Showdown Displays
Aaron Moscoe, CEO, TPS Promotions & Incentives (Based in Toronto)
“If you think about the impact on the [Canadian] automotive industry, it’d be massive if there isn’t an exemption,” Moscoe says. “Most automotive manufacturing in Canada would be expected to shut down within two weeks. You’re talking about potentially massive layoffs and then potentially inventory problems as well. So, my biggest concern is for the Canadian economy and Canadian manufacturing in general. And what that means for our clients. If you are in the automotive industry or another severely affected industry, are you going to put your spend on hold?
“For Canadian manufacturers who primarily supply goods in Canada to distributors in Canada, this could be a boon for them.”
Aaron Moscoe
CEO, TPS Promotions & Incentives
Anthony St. Peter, President, Stellar Lanyards
“Stellar Lanyards operates differently from many suppliers in that we manufacture our products from raw materials and handle our own imports into the U.S. as a bonded importer,” St. Peter says. “Through the strategies we’ve developed over the years, we’re well-positioned to mitigate the impact of any proposed tariffs. For our most popular products, the cost increase would be under $0.06 each, which allows us to remain competitive with overseas suppliers while still offering the same delivery speed as domestic competitors.
Anthony St. Peter
President, Stellar Lanyards
“With President Trump’s additional 10% tariffs on China and the elimination of the de minimis exemption, we’re in a strong strategic position. We anticipate a growth in business this year as a result, with or without the tariffs happening.”
Liz Haesler, Chief Merchandising Officer, PCNA (PPAI 100’s No. 3 supplier)
“The potential for tariff increases underscores the need for a flexible and proactive supply chain strategy,” Haesler says. “At PCNA, we are working on navigating the unknown complexities of future tariffs by standing firm on maintaining deep inventory for our top selling items.
Liz Haesler
Chief Merchandising Officer, PCNA
“It is important for suppliers in this industry to continue to focus on diversifying sourcing, optimizing inventory management and strengthening supplier partnerships to minimize disruption and adapt to evolving trade policies. By staying as agile as possible and by focusing on long-term strategies, suppliers can continue to provide value to their customers, even in the face of economic shifts.”
