Running a business requires ongoing diligence in controlling costs wherever possible. While you may pride yourself in managing risks, external forces beyond your control, like tariffs, can add unplanned expenditures and affect your bottom line.
External forces can wreak havoc on even the best budget planning.
Take, for example, the administration’s recent announcement of an additional $200B tariffs on Chinese imports. The list of products affected is long. Most fall under the raw manufacturing and food products area. But, since the promotional products industry encompasses a wide range of products, it’s a near certainty that categories such as apparel, electronics, drinkware, and toys will be affected.
Even higher tariffs could be forthcoming!
Some economists are predicting that a 25% tariff on ALL Chinese imports may eventually be imposed, replacing the current list of individually-targeted products. If this happens, promotional items such as pens, wearables, battery chargers, and nearly everything sold by promotional distributors would be subject to the 25% hike.
To-date, China has responded by imposing retaliatory duties on American imports. Where this all ends up is anyone’s guess. The only assurance is that the administration will begin conducting a two-month review of the tariffs listed at the end of August.
So, what should you do?
If your business incorporates promotional products as part of your marketing programs, you probably budget for these expenditures well in advance. If that’s the case, you may be wondering…
“What overall impact will the tariffs have on my current budget for promotional products?”
While even the best fortune tellers would be hard-pressed to answer that question, it’s prudent to assume that long term or permanent tariffs will impose pressures and increase promotional product pricing over time. The best course of action is to plan ahead.
Consider stocking up on promotional product inventory now.
If your budget this year originally called for delivery of promotional products at a later date (perhaps timed for the holiday season), consider requesting delivery now. The obvious advantage would be to avoid looming price increases that may lead to budget overages down the road.
The takeaway is simple – prudent business owners will consider all the ramifications of the new tariffs and take appropriate action.
Worrell can help in these uncertain times.
Regardless of the uncertainty surrounding the tariff policy, Worrell is well-positioned in the promotional products industry. With our strong creative and design services and cultivated vendor and client relationships, our dependency on any specific products or conditions in the global manufacturing marketplace is minimized.
We’re ready to help you navigate the choppy waters brought on by volatility in the promotional product marketplace. Call us to discuss your options. We want to help hold the line on promotional product prices.