How New Tariffs are Impacting Marketing Promotions

The term “Made in China” is such a common phrase it’s practically a coined term for most retailers (especially with plastic goods). As the United States’ largest trade partner, China accounted for $522.9 billion in imports in 2017 (in comparison to just $187.5 billion we exported to them). This means when it comes to low-cost commodity goods, there’s nearly a 4:1 chance that it’s coming from China.

This trade deficit is driving new China-trade tariffs and as a result has many businesses talking about profitability around sourcing and distributing products. If you don’t resell products made in China, your marketing team likely sources them to get in front of new and existing clients. Forbes reports that 71.6% of tradeshow attendees who receive a promotional product remember the name of the featured company. With the combination of direct mail and digital efforts, marketers are getting more leads than ever – and they aren’t giving up promotional and apparel products anytime soon. However, the implementation of China-based tariffs and trade disputes have created a lot of uncertainty and concern within the Advertising Specialty Institute (ASI) industry, and as predicted have prices going up. With 2019 upon us, many marketers assume the increase in tariffs and product prices means they are going to have to do more, with less…or are they?

When to expect product increases and how to handle 

The truth is, there are still many uncertainties in the industry. In the last half of 2018, news outlets reported there would be roughly $505 billion in additional tariffs on US imports from China. These tariffs affect any type of company that imports from China, not just promotional and apparel companies. So we’re all in the same import/export boat, so to speak. What we do know is that the restrictions and tariffs being implemented in 2019 will influence and result in customer selection of products and their spending budgets.

From a supplier perspective, our goal is to collect information, communicate, and consult clients through any industry changes.

• Several sources have communicated to expect a moderate increase of 2-5% in mainly promotional products coming from China in in the first half of 2019.
• Expect continued fluctuations in pricing on promo & apparel items throughout 2019.

What are your options to keep pricing down?

In order to keep pricing under control, we’re advising clients to be proactive during 2019 planning. This means consulting with a promotions and apparel expert on which products are domestic versus imported, and additional direct mail options that fit within your budget. Need ASI advice? Contact Andy Heavilin to discuss how we’re working with other clients to work around price increases while meeting target goals.

Additional resources on what to expect regarding trade tariffs in 2019:

1. https://magazine.promomarketing.com/article/how-the-tariffs-impact-the-promotional-products-industry-a-quick-update/
2. https://pubs.ppai.org/ppb-magazine/a-closer-look-at-section-301-tariffs/
3. https://magazine.promomarketing.com/article/trumps-90-day-china-deal-causes-uncertainty-for-promotional-products-industry/