“What kind of company do we want to be during difficult times?“
Business leaders across the promotional products industry have had to ask themselves that question in the aftermath of 9/11, amid the 2008 financial crisis, during the pandemic and now at the onset of a global trade war.
After President Donald Trump announced 25% tariffs on imports from Canada and Mexico in early February, Nigel Harris, co-founder and CEO of Ottawa, Ontario-based PowerStick, had his answer: PPAI 100’s No. 75 supplier would absorb the increased costs from the tariff rather than passing them on to customers.
Harris says the decision wasn’t an easy one, but it was guided by PowerStick’s core values and a long-term perspective.
“We’ve always prided ourselves on putting people first – both our team members and our customers,” Harris says. “Taking a short-term financial hit, even a significant one, seemed preferable to compromising those relationships or contributing to further economic strain in our industry.”
Nigel Harris
CEO/Co-founder, PowerStick
After making the decision, Harris called an all-hands meeting to lay out both the challenges ahead and the company’s commitment to maintaining jobs. Harris says an open channel for questions and concerns was created, and that the leadership team has made themselves available for one-on-one conversations.
“Transparency has been key,” Harris says. “The response has been overwhelmingly positive – there’s a sense that we’re facing this together rather than individuals bearing the burden alone.”
How long certain tariffs remain in place are likely to factor into promo businesses’ ability to absorb those costs. For some, it may already not be feasible.
Don’t Blink
Establishing a plan for navigating the tariffs has been challenging because of the roller coaster of changes on a seemingly daily basis. Here’s a quick recap:
Two days after announcing tariffs on the United States’ neighbors, Trump paused the levies for 30 days after meetings with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau, who seemed to have appeased his concerns about border security.
- He also imposed an additional 10% tariff on imports from China, which increased to 20% a month later.
- Beijing retaliated by imposing additional tariffs of up to 15% on imports of U.S. farm products, including chicken, pork, soy and beef.
On March 4, Trump implemented the tariffs, only to issue temporary exemptions just two days later. The exemptions apply to products that comply with the rules of origin under the U.S.-Canada-Mexico Agreement (USMCA) until April 2, 2025. That means the current tariffs still apply to about 50% of Mexican imports and more than 60% of Canadian imports, CNBC reported.
- Trudeau announced a $155 billion retaliatory tariff package.
- U.S. Commerce Secretary Howard Lutnick, Canada’s Minister of Finance Dominic LeBlanc and Ontario Premier Doug Ford are planning to meet on March 13 to renegotiate the USMCA.
RELATED: ‘Tremendous Spirit:’ Canadian Promo Pros Seeing National Pride Amid US Tariffs
Meanwhile, Trump has also indicated that the promised global reciprocal tariffs will go into effect on April 2, one day after a study among his administration on the levies is scheduled to conclude.
And then on March 12, 25% tariffs on steel and aluminum imports from all countries went into effect. Trump threatened to raise tariffs on steel and aluminum from Canada specifically to 50% in response to Ontario implementing a 25% surcharge on electricity it sends to New York, Michigan and Minnesota…in retaliation of Trump’s tariffs on Canadian goods.
- Just a few hours after his threat, Trump backed down and Ontario paused the surcharge.
- However, the European Union announced retaliatory tariffs on the U.S. worth $28 billion will take effect April 1.
Protecting Your Mental Health
The whiplash is sure to stress everybody out.
“I find it necessary to protect my state of mind in order to channel creative thinking and leadership wisdom,” says Heidi Reimer-Epp, CEO and co-founder of Winnipeg, Manitoba-based supplier Botanical PaperWorks, which sells seed paper to distributors in Canada, the U.S. and Europe.
“I do that by managing the amount of news that I’m taking in, staying physically active, spending time with friends and family and enjoying my hobbies of knitting and drawing.”
Heidi Reimer-Epp
CEO/Co-founder, Botanical PaperWorks
Of course, the avalanche of news can weigh you down. Instead of relying upon only headlines, which can be misleading, it’s important to get the facts. That’s why Ralph Goldfinger, co-CEO of Toronto-based supplier Canada Sportswear, hands out internal memos to all staff with the information that they need to know.
“As all companies can be affected by tariffs either directly or indirectly through a softening of the marketplace, we need to keep informed, stay calm and be adaptable and flexible,” Goldfinger says.
To clear his mind, Harris has been taking daily walks and making sure to disconnect completely for a few hours each evening while spending time with his family. “I’ve also found it helpful to connect with other industry leaders to share perspectives and remind ourselves that none of us are facing this challenge alone,” Harris says.
Good For America?
Promo firms have already reported that inflation and economic uncertainty are causing clients to delay or cut marketing budgets, according to PPAI Research’s tariff impact survey.
- Over 85% of respondents anticipate cost increases more than 5% due to tariffs, with over half experiencing moderate impacts and a third facing significant financial burdens.
But not all promo leaders consider the tariffs to be bad news.
David Bywater, president and general manager of Iowa City, Iowa-based distributor Bankers Advertising Company, says the purpose is to gain better opportunities for American workers and consumers. There are protections in place with some of the country’s biggest trading partners that are “unfair to us,” Bywater says, citing regulations protecting the Canadian dairy industry.
David Bywater
President/GM, Bankers Advertising Company
“Using tariffs to open markets is a strategy that has been successful in the past,” Bywater says. “We think some of the pressure on other countries will bring better trading relationships in the future and that [tariffs] will benefit suppliers who are committed to being American made. Right now, we’re focusing on how to continue to serve our clients.”
Made-in-USA suppliers are also supportive of tariffs, hoping that they’ll lead to higher sales. Driven by the benefits of reduced shipping times and supply chain resilience, nearly half (46%) of PPAI 100 suppliers and distributors plan to focus on domestic sourcing in 2025, according to PPAI Research.
RELATED: Navigating Tariffs: Strategies For Distributors And Suppliers
Jed Seifert, co-founder of Eastlake, Ohio-based Stakes Manufacturing, which specializes in print on demand, says there’s been growing discussion in the print industry about how changes in tariff legislation might affect the sector and U.S. manufacturing as a whole.
“For years, printers have shifted production to Mexico and Canada to take advantage of lower wages and the free flow of goods under NAFTA and now USMCA,” Seifert says. “Now, the print industry is facing significant uncertainty and change, which can be a good thing. Navigating change is resource-intensive and challenging, but it will ultimately lead to a more balanced supply chain, something essential for any thriving industry.”
Jed Seifert
Co-founder, Stakes Manufacturing
While Seifert acknowledges that these tariffs may put some companies out of business, he anticipates that higher costs in Mexico and Canada will shrink the pricing gap with U.S. printers. Ultimately, economic uncertainty will push clients to prioritize factors beyond cost – such as location, speed, quality and product options – resulting in stronger, more balanced domestic supply chains, Seifert says.
“Great companies that add value to the supply chain will continue to thrive, regardless of tariffs,” Seifert adds. “Ideally, this shift will bring the U.S. print industry a stability it has long been missing.”
‘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.)
Anthony St. Peter, president of supplier Stellar Lanyards, which is headquartered in Mexico City, will be participating in LEAD this year. He’s seen a surge in customer inquiries about the potential impact of these tariffs.
Many customers are concerned about orders getting delayed in customs or facing unexpected price increases after already quoting their clients at pre-tariff rates, leaving them to either ask for more money or absorb the extra costs, St. Peter says.
Anthony St. Peter
President, Stellar Lanyards
“After speaking with customers, explaining the customs process and outlining our plans to minimize price impacts, I’ve noticed a growing confidence in moving forward with orders, trusting that we’ll navigate these challenges effectively,” St. Peter says. “Now more than ever, it’s crucial for distributors to partner with suppliers who are well-versed in trade regulations and stay informed on the ever-evolving landscape of international commerce.”
Echoing that sentiment, Harris attributes the promo industry’s resilience to the trusted relationships its members build each day.
“While I don’t know how long these trade tensions will last,” Harris says, “I’m confident that companies that prioritize those relationships – with employees, customers and partners – will emerge stronger on the other side.”
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
