If April was a whirlwind for promo, then May was the industry learning how to navigate the whirlwind.

Headway in negotiations with China meant a 90-day break on the highest of the announced tariffs starting in mid-May, while back and forth court rulings on whether the tariffs could remain in place (the short answer right now: yes) closed the month. At the beginning of June, just before ASI Research’s now-monthly sales survey was fielded, the Trump administration announced heightened tariffs on steel and aluminum products.

Greater certainty and a reduction in the highest China tariffs had a notable effect within the promo industry. Even as the vast majority of companies still report they’re at least slightly concerned about the impact of tariffs on 2025 business, the percentage of both suppliers and distributors who described themselves as “very concerned” dropped in May.

Not surprisingly, the Counselor Confidence Index, which measures the industry’s financial health and business optimism, also ticked up for May. Distributors’ health ratings for the industry were up to 93 from 84 at the end of April, and projections for the remainder of the year were up as well.

For suppliers in particular, current business health ratings remained stagnant – but 2025 projection ratings jumped up 13 points, from 75 to 88, between the April and May reports.

The increased optimism for the rest of the year wasn’t reflected however in the May promo industry sales results. ASI Research found that year-over-year sales last month were slow or stagnant for the majority of both suppliers and distributors.

Half of suppliers and nearly half of distributors had lower sales last month compared to May 2024. That’s a larger percentage than reported year-over-year sales declines for April, as consumers likely continued to hesitate on spending in an uncertain economy and a tough labor market.

Still, the percentage of suppliers anticipating full-year sales increases for the year jumped up compared to this time last month. Half of suppliers are now projecting year-over-year sales improvement for 2025, compared with just 32% in early May.

The outlook for distributors was less rosy, with the percentage of companies expecting sales increases ticking down slightly from the April report, but there are still more firms anticipating increases than decreases.

With multiple months of tariffs under their belts, a sizable percentage of promo companies by now have been compelled to raise prices. Indeed, as of early June, over 70% of suppliers have raised prices – up from 45% at the end of Q1. Of all suppliers (including those who haven’t hiked what they charge), 35% have raised their prices by more than 10%.

On the distributor side, nearly two-thirds of companies reported upping prices as of early June, compared with 54% as of early May. Distributor increases are, notably, smaller on average, with less than 15% of companies hiking prices more than 10%.

In the latest report, nearly half of distributors (49%) and suppliers (46%) predict their 2025 sales will decrease if the tariff situation remains unchanged. On the supplier side, this was a major improvement from the previous month’s report, where 69% of suppliers predicted their sales would decline without a change in the tariff situation. The declines in the China tariffs had a major positive impact, and the Trump administration has subsequently announced that there would be no further changes coming to tariffs on China. While that would likely mean higher prices would stay in place or continue to roll out, industry leaders have told ASI Media the stability would be more than welcome.