How WIll Tariffs Effect Your Pocket?

There is a buzz in our industry and unfortunately the chatter is not about the new products being unveiled- it's about price increases!

What's going on? 

This past September, tariffs on nearly half Chinese imports were raised to 10.  Tariffs are expected to rise to 25% at the beginning of the new year and potentially could be on all of China’s imports to the U.S.  These tariffs are being pushed by President Trump due to an intellectual property investigation of Chinese high-technology companies that are engaged in numerous unfair policies and practices.  China is retaliating as well; tariffs on American goods have risen to 5-10% on $60 billion worth.  

What do we need to expect from the U.S. – China Tariff War?

This ongoing trade war will create a challenge among the promotional products market, since Chinese-made imports are increasing.  Products currently affected most are handbags, luggage, headgear, and LEDs; machinery parts and a wide variety of fabrics are also subject to the tariff increase.

Locally the Southwest Wake Chambers of Commerce are hosting a tri-chamber event, including the Apex, Holly Springs, and Fuquay-Varina Chambers of Commerce.

Mark Vitner, Director and Senior Economist with Wells Fargo will provide a detailed analysis of local and state economic conditions for 2019. Mark is a frequent guest on CNN and CNBC and has been featured in the New York Times, Wall Street Journal, Business Week and USA Today. This is a great opportunity for business professionals in any industry to hear and learn about the economic trends for 2019. Tickets are still available for Dec 5, 2018

Organizations such as the US Chamber are urging change, urging President Trump to consider the cost of tariffs on our economy, the message from the US Chamber website is: "The American economy is booming.  We have more jobs, higher wages and unemployment is at a historic low. But American businesses are being hurt by the costs of tariffs. Every week we wait, $500 million in U.S. exports and imports with Canada and Mexico are hit by unnecessary steel and aluminum tariffs. It’s time to end these tariffs and keep our economy moving forward. If you would like to share your opinions with elected officials on this topic there is more information in this link about tariffs, effects and call to action to sign this letter, from the US Chamber.

How are suppliers adapting to the unknown?

• Some suppliers will be trying to import from other countries, but many have their own manufacturing plants in China; it would take years for companies to transfer these plants to other countries.   
• Suppliers need to raise their prices to cover their added costs, which will mean higher prices on all goods.   
• What type of increases? It will depend on the item, but increases are expected as high as 25%.   
• To adapt many suppliers are advising that catalogs are likely not to be printed with pricing this year to allow for "real time" updates via their websites. 
• Additionally, they are suggesting that larger orders and larger ticket items such as bags are smart purchases before year end.  

Please be aware that prices will be subject to change throughout 2019 due to this geopolitical conflict. We will keep you updated as we know more about how you will be affected.