Another day, another round of new tariffs.

Late on Monday, Feb. 10, President Donald Trump signed a proclamation that establishes flat rate tariffs of 25% on steel and aluminum imports — a move some promotional products suppliers fear could compel higher prices on merch items that contain the metals, including the highly popular drinkware category.

While some press reports said enforcement of the higher duties will begin on March 4, 2025, the proclamation appears to indicate the new levy collection will commence on March 12, 2025. Bottom line: Unless suspended, the heightened steel and aluminum tariffs come into play in only about a month’s time.

Aimed at safeguarding and strengthening the domestic steel industry, something Trump reportedly views as essential for national security, the levies apply to millions of tons of steel and aluminum imports coming from any country, including the likes of Canada, Mexico, Brazil and South Korea, that had previously been operating under exemptions that allowed them to export the metals to the United States duty-free. The 25% steel rate had been in place for countries not granted exemptions; Trump’s Monday move raised his 2018 aluminum tariffs from 10% to 25%.

“It’s 25% without exceptions or exemptions,” Trump told journalists. “That’s all countries, no matter where it comes from, all countries … so that everyone can understand exactly what it means.”

10.7%
Percentage of industry sales accounted for by drinkware, a product category some promo executives worry will be subject to price increases because of the new levies. (Counselor State of the Industry Report)

Even so, promo suppliers with product categories that contain steel and aluminum were working to determine if the tariffs would indeed apply to the finished products they bring stateside.

“Until the actual Harmonized Tariff Schedule codes are released, we won’t know if these new tariffs will impact promo,” Jing Rong, vice president of supply chain and sustainability at Counselor Top 40 supplier HPG (asi/61966), told ASI Media. “For example, the Biden steel and aluminum tariffs from last year were mainly aimed at steel and aluminum products that are imported in raw material form. We’re not sure yet if President Trump’s tariff will expand to consumer products that are made from these two metals.”

Trump’s Feb. 10 proclamation indicates that the tariffs will apply, at minimum, to some derivative products of steel and aluminum. More specifics germane to promo weren’t immediately evident, but at least one of a number of requirements the federal government has used to determine if a product is a steel or aluminum derivative is that steel or aluminum accounts for two-thirds or more of the total cost of materials of the product.

“At this time, suppliers and distributors all need to work together and be true partners. We have weathered the tariff storm before and we can weather it again.” Dan Jellinek, The Magnet Group (asi/68507)

Some industry leaders believe the tariffs will hit promo in the gut.

“The new steel/aluminum tariffs will have a great impact on our industry,” Dilip Bhavnani, chief operating officer of Counselor Top 40 supplier Sunscope (asi/90075), told ASI Media. “When you consider how many products we use in the industry that are made from metal products that will increase in cost by 25% almost immediately, how could it not have a major impact? Think about drinkware, keychains, photo frames – these are just a few categories that will be impacted.”

According to Counselor’s 2024 State of the Industry Report, drinkware is the second bestselling category in promo, accounting for nearly 11% of distributors’ total sales.

“We need to do a deep dive into what products are going to be hit with the new tariffs on metal, but if they do affect drinkware, then we will now have an additional 35% cost on that category,” said Trevor Gnesin, CEO of Counselor Top 40 supplier Logomark (asi/67866) and a member of Counselor’s Power 50 list of promo’s most influential people.

Gnesin’s 35% figure is a calculation based on the steel- and aluminum-specific tariff, as well as the new 10% tariff rate that Trump imposed last week on imports from China in addition to levies that were already in place on that nation.

All aboard the #tariff rollercoaster ~ #Promoproducts executives are encouraged by the suspension of import tariffs on Canada & Mexico, but say levies that went into effect on China still stand to propel price increases in promo if left in place. https://t.co/2Wt9hoTETp

— Chris Ruvo (@ChrisR_ASI) February 4, 2025

Power 50 member Dan Jellinek is concerned that drinkware could be in the crosshairs of the new tariffs. “Prices will probably need to rise,” said Jellinek, chief revenue officer at Counselor Top 40 supplier The Magnet Group (asi/68507).

Some promo executives are also trying to take the new tariffs as an opportunity. “With the new tariffs on aluminum and stainless steel, price increases may seem like the obvious response, but we see this as an opportunity to innovate — exploring alternative materials that meet both quality expectations and budget needs,” Power 50 member Heather Smartt, global head of Counselor Top 40 supplier Goldstar (asi/73295), told ASI Media.

In addition to the steel and aluminum tariffs, Trump said that on Tuesday or Wednesday he would be announcing plans for “reciprocal” tariffs. Potentially, this would involve placing likewise levies on nations that have tariffs on the United States.

Some analysts note this isn’t as severe as flat tariffs of 10% to 20% on all imports that Trump floated during his presidential campaign. In interviews, Trump mentioned cars, semiconductor chips and pharmaceuticals as potential targets of reciprocal tariffs. He said the tariff plan would be “very sophisticated.”

Importers can again use the “de minimis” exemption to bring products into the United States from China tariff-free, but the president is still looking to ultimately eliminate the levy loophole.https://t.co/k4JyIoKBcp

— Chris Ruvo (@ChrisR_ASI) February 10, 2025

Promo executives are keeping an eye on the reciprocal announcement to see how, if at all, the tariffs might affect the industry. Depending on what exactly is announced, the reciprocal levies could make it more expensive to import promo products from certain nations. This could potentially diminish some of the cost-saving impacts suppliers have realized by moving some production out of tariff-laden China to other nations – though specifics still need to be understood.

“Once we see the list of countries that are involved, we’ll be able to better see how this plays out,” said Power 50 member John Bruellman, CEO of Counselor Top 40 supplier Showdown Displays (asi/87188).

Since taking office, Trump has imposed additional tariffs of 10% on China-made imports. He implemented and then suspended until at least March 1 tariffs of 25% on imports from Canada and Mexico. He eliminated a loophole that allowed certain lower-value imports from China to enter the United States duty-free, but then suspended that order, which again allowed such tariff-free entries to occur.

U.S.-based importers, such as promo products suppliers, pay the tariffs, not foreign governments or overseas companies. It's all made for uncertain times for promo – and industry at large.

“At this time, suppliers and distributors all need to work together and be true partners,” Jellinek told ASI Media. “We have weathered the tariff storm before and we can weather it again. We will see price increases, but working together we can mitigate.”

Smartt shared a similar perspective.

“At the end of the day, this industry is built on resilience,” she told ASI Media. “We’ve adapted before, and we’ll do it again, finding better solutions for our partners and pushing innovation forward. I remain optimistic and excited to embrace new opportunities over the next four years.”