President Donald Trump on Monday suspended for 30 days the implementation of 25% tariffs on imported products from Mexico and Canada, but left in place new levies of 10% on China-made goods that are in addition to excises previously installed upon that nation.

The stay on Mexico and Canada tariffs came as promotional products companies hustled to grasp the potential impacts of what could be a new trade war with America’s three largest trading partners, an effort that has included determining how to communicate about possible levy-related issues with customers.

Trump suspended the tariffs after holding talks with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau on Monday. Canada likewise suspended tariffs it had planned against the U.S.

Trump’s stated reason for wanting to enact the tariffs is, in part, to compel Canadian and Mexican authorities to intensify efforts to prevent the flow of illegal drugs, especially fentanyl, and illegal immigrants over the borders into the U.S. The pauses on tariffs came after both nations pledged to take steps to ratchet up border security.

Promo companies, particularly those with operations in Canada and Mexico, welcomed the news, hoping the suspension will ultimately remain permanent. An enactment of 25% tariffs on Mexican and Canadian imports would complicate merch commerce between the U.S. and those nations, and almost certainly stoke price increases on products imported into America. Those consequences have been prevented, at least temporarily.

“We are heartened by the pausing of tariffs on Mexican imports into the U.S. and are hopeful that this pause will continue.” Chris Anderson, HPG (asi/61966)

Massachusetts-headquartered Counselor Top 40 supplier HPG (asi/61966) has operations in Canada and Mexico, including a production facility for its Evans Manufacturing (asi/52840) brand in Nogales, Mexico, which primarily serves the U.S. market.

“We are heartened by the pausing of tariffs on Mexican imports into the U.S., and are hopeful that this pause will continue —as the free trade agreements between our two nations have been of mutual benefit for over three decades now,” HPG CEO Chris Anderson, a member of Counselor’s Power 50 list of the promotional products industry’s most influential people, said in statement sent to clients.

Samantha Kates, president of Canada-based Counselor Top 40 supplier Spector & Co. (asi/88660), called the pause on tariffs by the U.S. and Canada a win for promo businesses on both sides of the border.

“While we’re always preparing for different scenarios, this gives us all a little more time to plan ahead in a thoughtful way,” Kates told ASI Media. “That said, our long-term focus hasn’t changed: We remain committed to delivering the best possible service, no matter what comes next. And as we know in this industry, there’s always a ‘next.’”

Eye on China

While promo broadly greeted the suspension of tariffs on Canada and Mexico as good news, executives told ASI Media that the China levies, if left in place over time, will still probably prompt many suppliers that rely on that nation for at least some manufacturing of the products they sell in the United States to raise prices on those merch items.

The majority of products promo purveys in North America are manufactured overseas, particularly in China when it comes to hard goods.

“Price increases would still be coming if the China tariffs aren’t done away with, especially since most hard goods suppliers in our industry source very limited finished goods out of Canada and Mexico,” one executive of a leading supplier firm who wished to remain anonymous told ASI Media. “The primary impact for our industry remains China. Some experts believe the president is not done at 10%. They think there’ll be additional tariffs on China. But at this point, who knows?”

$1.6 Trillion
Annual business the U.S. does with China, Canada and Mexico (CNBC)

Power 50 member Yuhling Lu, CEO/co-owner of Counselor Top 40 supplier Ariel Premium Supply (asi/36730), told ASI Media that “even if Mexico and Canada tariffs never go into effect, yet China's remain, there will still be a need for suppliers to raise prices on the Chinese goods. With today’s increasing operating and other costs, many suppliers will not want to absorb the entire amount. It is simply too much of an impact on margins.”

Anderson shared a potential bright spot, asserting that the implementation of tariffs can be accompanied by shifts in currency valuations, which can have a partially mitigating impact on the real cost of tariffs. Regardless, he said HPG, like many other suppliers, will work intensely to prevent any potential price hikes, including adjusting its global upstream supply chain and investing in efficiency-driving opportunities that trim costs without sacrificing quality.

“Prior to considering any possible tariff-driven increase to the selling price of our products,” said Anderson, “HPG will first exhaust any and all opportunities to offset the impact of tariffs. Only after all such mitigating strategies have been exhausted, will HPG break out the net impact of tariffs and provide a transparent view of their impact on pricing.”

15%
That’s the additional tariff rate that Chinese authorities are implementing on select U.S. imports to China, including coal and liquefied natural gas. Additional tariffs of 10% are earmarked for crude oil, farm equipment and some cars and trucks. The levies are in retaliation to the new U.S. tariffs on China-made goods.

Suppliers have said that they anticipate hard goods categories would be more substantially impacted by price increases than apparel, as more promo garment production occurs outside China these days than in years past. “With highly minimal exposure to tariff fluctuations, our pricing remains transparent and competitive,” said Matt Rubin, director of strategy at Counselor Top 40 supplier Blue Generation (asi/40653), which manufactures in Egypt.

Still, some hard goods makers are pledging to hold the line on pricing too. Ontario-based Powerstick (asi/51566) has made such a vow. “Regardless of any tariffs imposed on our products, we will absorb these entirely,” said CEO Nigel Harris in a public statement to promo posted on LinkedIn.

“We have already started moving some products to countries other than China, namely Southeast Asia. Several of our current China factories have already opened production facilities in these countries.”Yuhling Lu, Ariel Premium Supply (asi/36730)

Keep in mind: Suppliers probably will not hike prices overnight. It’s possible they’ll sell through inventory brought stateside from China before the new tariffs at current pricing levels. But once that stock is gone, suppliers could have to increase what they charge for products they pay more to import under the new tariffs.

Promo executives have also said that, if the China tariffs remain, suppliers will further accelerate supply chain resilience efforts that have been underway for years – namely moving at least some production, when possible, to nations not affected by levies.

“We have already started moving some products to countries other than China, namely Southeast Asia,” said Lu. “Several of our current China factories have already opened production facilities in these countries.”

Dealing With Tariff Tumult

If nothing else, the tariff situation, with all its unpredictability over how things will play out, has caused uncertainty for distributors and suppliers. For distributors, part of the angst has included wrestling with how to communicate about possible levy challenges with end-clients at this stage in the game.

Approaches have varied.

New York City-based Harper+Scott (asi/220052), a Counselor Best Place To Work, has been having one-on-one conversations with clients that ask about potential impacts.

“If tariffs stay in effect, solutions exist — whether through sourcing shifts, pricing adjustments or longer-term planning. But until then, patience is key.” Michael Scott Cohen, Harper+Scott (asi/220052)

The firm’s message has been that everything is business as usual for the time being, until it’s time to pivot, said Power 50 member Michael Scott Cohen, the firm’s CEO and co-founder. Harper+Scott is not currently pushing out broad communications, given the cloudy crystal ball on the tariff endgame.

“Instead of adding to the noise, our approach is to stay informed, monitor developments closely and communicate when there’s something real to say – rather than just trying to be first in the inbox,” Cohen told ASI Media. “For distributors, I’d say the best strategy right now is not to create panic where none exists. If tariffs stay in effect, solutions exist – whether through sourcing shifts, pricing adjustments or longer-term planning. But until then, patience is key.”

Meanwhile, Counselor Top 40 distributor Quality Logo Products (QLP, asi/302967) conveyed that talking through tariff issues with clients in person or over the phone is best at the current moment. “A banner on your website saying pricing might change comes off as cold and not very professional,” said QLP President Bret Bonnet.

QLP is taking steps in anticipation of pricing impacts. To wit, the firm is reducing the amount of time that it’s honoring pricing from 90 days to 30 days and staying in close communication with key suppliers about what to expect.

Kind of a big deal. #tariffs https://t.co/8ZgsIhgjt0

— Chris Ruvo (@ChrisR_ASI) February 2, 2025

“If you have program business or company stores, now might be a time to connect with your client and communicate the reality of the situation and maybe devise strategies, but most agreements should have clauses to protect the distributor from uncontrolled or unforeseeable situations like this,” Bonnet shared.

Gloria Lafont, president/owner of Florida-based distributor Action Marketing, said that distributors should be communicating now with clients about tariffs through a variety of channels, including a blog on their websites, email and even social media.

“A blog post is ideal,” Lafont told ASI Media. “This can be easily shared multiple times, driving traffic to the website. This is especially important when there is a sales team, so everyone shares the same content that reflects the company’s point of view. Additionally, when a prospective client is considering doing business with the distributor, they’ll check their website and find their content, and the prospect will perceive them as experts in the field, increasing the chances of being selected among competitors.”

The messaging should include a positive focus. “With so much negativity surrounding us,” Lafont said, “share a message of reassurance. Let clients know they will be able to get the merch they need for their events, and that you have their backs. Explain how you have been anticipating this situation and are prepared to help them make the most of their budgets. Acknowledge that there could be price increases, but if they are flexible, everything will be fine.”