Tariffs and Promotional Products
What are tariffs and how will they affect the promotional products market?
The implementation of China-based tariffs and ongoing trade disputes have created a great deal of uncertainty and concern in the promotional products industry. Tariffs are specific to China-manufactured products which represent the primary source of supply for our industry. Current tariff rates are at 10% and were set to increase to 25% on Jan 1, 2019. As of now, there was a temporary agreement to hold off on the increase for an additional 90 days going into the New Year.
So what does this mean? It means that once the tariffs go up, we will see a dramatic increase in the cost to purchase promotional products, and this industry is not alone. Manufacturers and importers across all sectors of the US economy have been raising prices this year with additional increases expected over the coming months.
What can be done? Many suppliers have been diligently working on negotiating lower buying prices with their China facilities and have also begun expanding their production outside of China into Vietnam, Cambodia, India, etc. This should help offset SOME of the increases in costs, however it is not a complete solution. Some suppliers will be gradually increasing their prices throughout the year and others will start the New Year with all new pricing based on these tariffs.
There is no question that the tariffs and related price increases will be challenging for our industry-nonetheless, it is a challenge that collectively we will need to work through together. At Unforgettable Goods we will continue to do everything we can to keep you informed on this situation and ask for your patience during this process.
Please understand that these price increases are fluid and out of our control. Therefore, moving forward, ANY QUOTES THAT ARE GIVEN WILL ONLY BE VALID FOR 4 WEEKS AND PRICES ARE SUBJECT TO CHANGE.
Should you have any further questions on this, please feel free to contact us directly.