The situation has been unfolding very rapidly, but here is what we know today:
- Tariffs on the existing $200 billion of Chinese imports will increase from 10% to 25% effective June 1st (for shipments made prior to May 10th).
- The 25% tariff impacts the product categories originally included in the 10% tariff regulations that were enacted last September 2018. The major categories relevant to promotional products are: Bags, Stationery products, and portions of Drinkware, Technology and other Accessory categories.
- The U.S. Trade Representative announced recently that the U.S. has begun the formal process to expand the 25% tariff to all other imports from China (i.e. those currently not subject to tariffs).
- This represents an additional $300+ billion of imports from China and would cover a large majority of promotional product categories. The public hearing and comment period end June 24th – so the expanded range of tariff categories would not be imposed until after that date.
How to combat these increased tariffs that impact your purchasing power? Here are some suggestions:
1. MOVE UP YOUR PURCHASE DATES: If you know you are having an event in July, August or later in the Fall and can purchase now, you should consider doing so. You may even want to purchase your year-end customer Holiday season gifts now, to lock in on lower pricing.
2. BUY NON-CHINA PRODUCTS: This may not be simple or easy in some of the affected product categories, but for example there are tote bags that are made in U.S. and others that are made in India, Vietnam and other countries not subject to the tariffs. Similarly, there are virtually no U.S. made garments, but many of the clothing imports are produced in countries other than China so you have options.
3. NOT ALL ITEMS ARE SUBJECT TO TARIFFS: Items that are already warehoused in the U.S. should not be affected by the tariff increase.
4. PRICES MAY NOT CHANGE IMMEDIATELY: Some factories are not planning to increase prices until July 1st (see point #1)
5. SWITCH PRODUCT CATEGORIES: See if you can switch to a different product category that is not currently subject to import tariffs.
Sound difficult or confusing? Give me a call at 847.398.5500 and I can steer you in the right direction to maximize your budget and consider the best options for your marketing objectives. But call soon to avoid any additional tariffs that could have budget implications.