Less than two weeks away from President-elect Donald Trump’s second inauguration, the promotional products industry waits with bated breath to see what his official trade policy regarding tariffs will be.
On Monday, The Washington Post reported that Trump’s aides are considering tariff plans that would be applied to every country, but only cover critical imports, such as those “deemed critical to national or economic security.”
That would be a significant shift from Trump’s vows to place 25% tariffs on all imports from Canada and Mexico, as well as a 60% tariff on Chinese imports, which would be added to any Chinese tariffs already in place from his first presidential term and maintained during the Biden administration.
- During the campaign trail, Trump even mentioned across-the-board tariffs of 10% to 20% on all imports.
Trump quickly criticized The Washington Post’s report, denying that his tariff policy will be pared back.
If Trump does impose wide-sweeping tariffs, he’ll likely use a national security measure, such as the International Emergency Economic Powers Act, to quickly set the levies rather than Section 301 of the Trade Act of 1974, which he used to set duties on China during his first term, according to reporting from Alex Lawson of Law360.
“I don’t think President Trump is interested in waiting for that sort of process this time around,” Sidley Austin LLP partner Ted Murphy told Law360. “The only process (under IEEPA) is a presidential sort of finding. Like he has to declare a national emergency, or he has to make a finding of fact that other countries are discriminating. He can do that from his desk at the White House.”
Opposition To China
China has been in Trump’s crosshairs since his first administration, when he levied tariffs on thousands of Chinese imports valued at approximately $380 billion due to theft of U.S. intellectual property, according to the Tax Foundation.
Relations between the world’s most powerful countries haven’t exactly improved during the Biden administration, as evidenced by the U.S.-China Economic and Security Review Commission’s annual report released in November.
The commission recommended that Congress revoke China’s permanent normal trade relations with the U.S.
- It’s the first time the advisory panel has explicitly called to end a treatment that has been central to Beijing’s economic prosperity.
“Given the President-elect’s tough stance on China, we expect this issue to be among a laundry list of legislative and regulatory levers lawmakers will be examining,” says Kyle Sanders, senior vice president at Thorn Run Partners, PPAI’s advocacy partner in Washington, D.C.
RELATED: Promo Reacts To Trump’s Mexico/Canada Tariff Threats
The report also urged Congress to close the “de minimis” loophole, which allows items valued under $800 to enter the U.S. duty-free.
- The number of de minimis shipments entering the U.S. rose from 140 million to over a billion a year in the past decade, The Washington Post reported.
Claiming that the loophole has been exploited by Chinese e-commerce companies, such as Temu, the Biden administration has proposed a rule that would require more information for such small shipments to better protect against harmful chemicals or fentanyl entering the U.S.
Frontloading Imports
Some promo firms like HIRSCH, PPAI 100’s No. 20 supplier, have been frontloading inventory in preparation for possible foreign tariffs.
“We have increased our stock levels to try to limit supply issues in the first quarter, and depending on the extent of the tariffs, delay price increases for as long as possible,” says Paul Hirsch, MAS, CEO of HIRSCH. “We’ve also made a concerted effort over the last four years to partner with manufacturers that produce outside of China.”
Paul Hirsch, MAS
CEO, HIRSCH
S&S Activewear, PPAI 100’s No. 5 supplier, has evaluated a select group of suppliers for extending inventory an additional four to six weeks.
“Overall, we’re confident in the depth and breadth of our existing inventory, which allows us to maintain a proactive approach in mitigating any potential supply chain interruptions for our customers,” says Josh Clark, COO of S&S Activewear.
Josh Clark
COO, S&S Activewear
As a result of Trump’s tariff threats, many promo firms are re-evaluating where they source their products and materials from.
Nearly half (49%) of PPAI 100 suppliers identify Southeast Asia (excluding China) as a key region for sourcing in 2025, according to the latest data from PPAI Research.
- India and Mexico, each selected by 27% of suppliers, are positioned to become more significant in sourcing strategies, reflecting their growing capabilities in manufacturing and proximity to major consumer markets.
Meanwhile, nearly half (49%) of PPAI 100 distributors are planning to increase sourcing from Mexico and 43% from Southeast Asia (excluding China).
- South America and India, each selected by 23% of distributors, are also positioned to become more significant in sourcing strategies.
- Additionally, 16% of suppliers and 11% of distributors cite other areas like Canada and Central America, pointing to a broadening geographic focus.
However, it can take at least five years to “sufficiently change a company’s sourcing makeup,” according to Jonathan Todd, vice-chair of the transportation and logistics practice group at law firm Benesch Friedlander Coplan & Aronoff.
“It’s 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,” says Liz Haesler, global chief merchandising officer at PCNA, PPAI 100’s No. 3 supplier.
Liz Haesler
Global Chief Merchandising Officer, PCNA
Made In America
Companies that rely upon domestic manufacturing, like 3M Promotional Markets, the No. 13 supplier in the PPAI 100, are hoping to benefit from whatever Trump’s official trade policy may be.
“As we begin to hear more and more about tariff concerns, 3M Promotional Markets is secure in knowing that over 98% of our products are both made from materials in and manufactured in the U.S.,” says Misty Friedrichs, CAS, contract national sales manager for 3M Promotional Markets.
Misty Friedrichs, CAS
Contract National Sales Manager, 3M Promotional Markets
“We believe this highlights how U.S.-based production & sourcing can act as a safeguard against unpredictable global trade challenges.”
- Nearly half (46%) of PPAI 100 suppliers and distributors plan to focus on domestic sourcing in 2025, driven by the benefits of reduced shipping times and supply chain resilience, according to PPAI Research.
Thanks to Trump’s push for domestic manufacturing, Colleen Shea, vice president of sales at All American Writing Instruments (PPAI 113946, Silver), predicts a rise in “Made in USA” sentiment among the promotional products industry and beyond.
- The Linden, New Jersey-based company will be supplying pens handed out during Trump’s inauguration.
“We saw during the pandemic that something like this does put in the mind of a distributor that maybe they need to diversify and include a U.S. option in their portfolio of suppliers,” Shea says.
Colleen Shea
VP of Sales, All American Writing Instruments
“When things like tariffs happen or when a port gets shut down, it would be good for distributors to have an established relationship with a USA-made company that they know has filled orders and that they feel comfortable doing business with.”
PPAI’s Stance On Tariffs
A recent PPAI member survey showed that 80% of suppliers and almost 40% of distributors see tariffs and trade restrictions as the most impactful issues on the horizon.
In response, PPAI recently sent a letter to more than three dozen Congressional leaders and key committee members with a message conveying the economic impact of promotional products and encouraging Congress to exercise oversight of any future tariffs.
The letter, signed by interim President and CEO Dawn Olds and Board Chair Andrew Spellman, vice president of corporate markets for Therabody, is the first step in the Association’s strategy on this issue. Members of the Government Relations Action Council will also be sending letters.
Now, PPAI is asking members to download, customize and send this letter to your own representative and senators.
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
