The latest round of China tariffs went into effect on May 10th, raising tariffs from 10% to 25% on over $200 billion worth of imported goods. (We wrote about this back in October 2018. Click here to read that post.)
We understand that you’ve got questions, so we’ve done our homework to help you better understand what to expect in the coming months.
#1: Which items are affected by the China tariffs?
The additional tariffs only affect the items originally listed in the September 2018 tariffs. For the promo industry, this includes items like:
· Bags, backpacks and totes.
· Coffee mugs and other types of drinkware (including stainless-steel tumblers).
· Hand sanitizers.
· Headwear (caps, beanies, etc.)
· Certain apparel items (like fleece).
· Leather products.
· Most metal products.
· Technology items/electronics.
· Custom products.
#2: Will prices go up?
Although most suppliers absorbed the initial 10% tariffs, many say that they can’t stretch to cover the bump to 25%. Price increases are inevitable at this point.
Jeremy Laney, Executive VP of Sales at Outdoor Cap, said in a recent email:
Because of our diverse supply chain, we have been able to hold our prices at the level they were prior to the first tariff applied on headwear in September of 2018. However, as a result of increased tariffs, various factory wage increases, and overall rising costs in Asia, we are implementing a 5% price increase effective July 1, 2019.
Other suppliers have told us that they plan to make incremental increases over the next couple of months, ranging from 2% to 10%. Most of those increases will go into effect in June and July.
#3: Will the China tariffs affect any other items?
It’s possible. If China and the U.S. don’t come to a trade agreement, the U.S. could levy tariffs against a broad range of items. That could include things like calendars, swimsuits, various coats, bathrobes, baby garments, track suits, yoga pants, all manner of T-shirts, ties, gloves, blankets, golf balls, umbrellas, stemmed glassware and more.
We expect to know more by early July.
#4: Why can’t you just buy it from somewhere other than China?
When the trade war began, many suppliers shifted some of their production to places like the Philippines, Vietnam and Central/South America. However, diversifying the supply chain takes time, strategy and a pretty hefty capital investment…so it doesn’t happen overnight. Having said all of this, many suppliers are working on this feverishly.
Keep in mind that we also offer a number of “Made in the USA” product. On our our Shop JDA website, you can search for American-made products by clicking on the “Made in the USA” search filter as shown below. As you can see, our search for “coffee mug” turned up 769 USA-made options.
#5: What, if anything, do I need to do?
- Verify pricing with your sales rep before you place an order. Even our Shop JDA site may not reflect the most current pricing due to the sheer volume of pricing updates.
- Realize that the shelf life on a quote is shorter than it used to be. That quote you asked for six months ago might not be valid anymore. Reach out to your sales rep and they’ll be happy to provided an updated quote.
- Place orders before price increases kick in on July 1st. If you’ve got an order that might be affected by the tariffs, talk to your rep and try to get that order in before the next round of price increases kicks in.
- Talk to your rep about any concerns. Our team is here to support YOU, and if we don’t know the answer, we’ll find it for you. As your branding partner, we will do everything we possibly can to help you continue to maximize your marketing dollars and navigate this tariff situation.
Don’t hesitate to contact us with any additional questions!