Donald Trump on Saturday made good on a campaign promise to impose stricter tariffs on three of the United States’ largest trading partners, announcing a 25% levy against goods from Canada and Mexico, according to multiple reports.
While The White House imposed an additional 10% tariff on Chinese imports, it stopped well short of the 75% increase Trump had threatened on the campaign trail last year. Still, the increased tariffs on three primary sourcing destinations for promotional products is expected to be felt around the industry in the United States.
- The measures aim to address concerns over trade imbalances, illegal immigration, and drug trafficking.
- The Canadian tariff will go into effect Tuesday, Feb. 3, according to The New York Times.
Amid a flurry of executive orders signed in the first days of the new Trump Administration, the President had directed the Commerce and Treasury departments and the U.S. Trade Representative to probe the economic and national security risks of large trade deficits and provide recommendations by Feb. 1. As details of the intended tariff increases began to emerge on Friday, Trump said there was nothing the three countries could do to delay the moves further, according to Reuters.
North American Promo Implications
The promotional products industry in North America, which relies heavily on imported goods, is poised to feel the immediate effects of these tariffs. Items sourced into the U.S. from China, Mexico and Canada will likely experience price increases, with some of the additional costs expected to be assumed by suppliers and distributors, and more being passed along to end buyers.
Exporters from Canada and Mexico, where several American suppliers diverted manufacturing in the nearshoring movement of recent years, also express worry about the impacts on business.
“Our members share many of the same concerns as those companies in the United States,” says Jonathan Strauss, president and CEO of Promotional Products Professionals of Canada. “The issue is that many products come into Canada from the U.S. that are manufactured overseas. Presumably, any tariffs on those products will be passed along. The other concern is Made in Canada products that are exported to the U.S. could see a substantial price. Our supplier members who manufacture in Canada would certainly be impacted if a tariff was added to their products entering the U.S.”
Jonathan Strauss
President & CEO, PPPC
The only announced exemption on Saturday’s tariff levies was for Canadian oil, which will be subject to a 10% tariff. PPAI Media will be monitoring updates from the Trump Administration for further exemption news as it becomes available.
Since November’s election, American branded merchandise firms have been preparing for Trump to pay off his promise of increased tariffs. Some suppliers told PPAI Media they were stocking up on inventory to avoid supply problems during the first quarter of 2025. Others have sought to diversify sourcing to other countries, although during the campaign Trump had also floated a 10-20% tariff increase across the board.
Distributors have been gearing up as well by readying clients for the likelihood of higher costs.
“Tariff conversations started with some clients in December, as some clients were making budget forecasts,” says Javier Melendez, national sales executive at PPAI 100 distributor Walker-Clay. “Thankfully a lot of suppliers started making moves well in advance to prepare for this, but it’s going to be a factor, regardless, for everyone.”
Javier Melendez
National Sales Executive, Walker-Clay
Chinese Imports
Considering the massive amount of stateside promotional products manufactured in China, the threat of a 75% tariff increase was a major cause for concern, according to suppliers and distributors PPAI spoke to since the election.
Alok Bhat, PPAI’s market economist, research and public affairs lead, had projected that even a 20% increased levy against China could result in 4-8% price increases passed along to end buyers. At a smaller 10% rate on most products, the cost increase would be closer to 3-5%, or less depending on currency manipulation steps China could take to stave off demand reductions.
Alok Bhat
Market Economist, Research & Public Affairs Lead, PPAI
PPAI’s Efforts
A PPAI member survey last fall showed that 80% of suppliers and almost 40% of distributors saw tariffs and trade restrictions as the most impactful issues facing the industry under the new administration.
In response, PPAI and its advocacy firm Thorn Run Partners in December 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 Association also asked members to download, customize and send the letter to their own representatives and senators.
PPAI will be working closely with Thorn Run Partners and the Government Relations Advisory Council to assess its next actions in response to Saturday’s tariff orders and will communicate how members may assist in amplifying the industry’s messaging.
- Applications for Legislative Education and Action Day, PPAI’s annual in-person advocacy outreach on Capitol Hill, are open to members until Feb. 14.
- LEAD 2025 is scheduled for April 7-8.
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
