Total Turmoil

While on the campaign trail last year, President Donald Trump pledged to implement new tariffs on imports. He meant what he said.

Since starting his second term in the White House in January, tariffs have been the central feature of Trump’s trade agenda, as well as the defining theme of the global economy’s story in 2025 – which has presented significant challenges for promotional products distributors.

Indeed, distributors have contended with issues that include higher pricing from domestic suppliers, increased costs tied to direct-from-overseas imports, lost orders and clients delaying spend as they take a “wait and see” approach. Relatedly, distributors have scrambled to pivot clients from one solution to another to meet budgetary constraints – and to adequately explain levy impacts and why promo remains a cost-effective, worthwhile investment.

All of that is fallout from tariffs that were implemented, tariffs that were threatened, and tariffs that were implemented and then paused. To date, the president has placed a 10% baseline tariff on all imports, along with higher rates on Chinese imports and select imports from Mexico and Canada, among other things. The moves have created widespread market uncertainty, and for distributors it’s been a whirlwind just to keep up.

“The tariffs have had a negative impact on our business,” says Tom Goos, president/CEO of Image Source (asi/230121), a Counselor Best Places to Work company. “We’ve seen many canceled opportunities for projects we were working on.”

Customers have specific budgets for their campaigns, and they’re fretting about tariff-driven increased product costs and what effect that will have on what they can buy for both new merch initiatives and reorders, distributors say. “Clients,” says Goos, “are also concerned about the overall economy, market volatility, and how that will impact their businesses and revenue.”

Such worries can detract from promo investment, and was a major reason why on average distributors’ sales declined by 3.6% year over year in the first quarter of 2025 and by 3.2% in Q2, ASI Research shows.

“We’ve had several clients cancel projects due to them becoming cost-prohibitive because of tariffs,” says Josh King, CEO of You Name It Specialties (YNIS, asi/365123), a Counselor Best Place to Work. “We’ve also had situations where supplier inventory orders were delayed because of tariff-related issues, so client orders were unable to be filled. Additionally, there’s been a need to explain cost increases to clients for ongoing projects and orders that were in production but not yet shipped.”

Jo Gilley, a member of Counselor’s Power 50 list of promo’s most influential people, says certain clients have become more cautious, as marketplace uncertainty makes them leery about investing in branded merch. “Some have been postponing spend or asking more questions about pricing and timing,” says Gilley, who was most recently CEO of Counselor Top 40 distributor Overture Promotions (asi/288473).

Despite challenges, distributors are not throwing in the towel. They’re adapting and navigating a choppy market – an effort that includes front-line sales pros digging into relationship building and consultative practices with end-clients to prove themselves true partners in tough times. And indeed, distributor concerns about tariffs, while still high, have declined steadily since their peak at the end of Q1, as measured by ASI Research.

YNIS, for instance, is highlighting USA-made products where possible, as such items can offer more pricing stability. The firm is also identifying suppliers that provide what King calls more client-friendly options, such as offering guaranteed delivered pricing. “We’re being more proactive in our marketing efforts, encouraging clients broadly to consider promotional product spending as the sales environment is more challenging,” King shares.

Distributors are working hard behind the scenes too. “We’re negotiating pricing and terms with suppliers for larger projects or ongoing programs,” Goos says. “We have a program that had an expedited freight element to it and we negotiated that there would be no price increases, but we would start shipping standard to mitigate the costs. The client was thrilled with that result.”

Distributors are also staying nimble, pouncing on opportunities that may appear out of the shifting sands. Stowebridge Promotion Group (asi/337500), a Counselor Best Place to Work, had some clients pumping the brakes on larger orders that involved direct-from-overseas importing. But when the White House suspended certain higher tariff rates at least temporarily, Stowebridge acted swiftly to move the campaigns forward.

Such adaptability has proved powerful for some distributors. To wit: Despite lost orders and impediments, both YNIS and Image Source are still predicting sales growth in 2025.

“We’re thrust into a time of great uncertainty,” says Stowebridge President Kathy Finnerty Thomas. “In times like these, we need resiliency and creativity. We’ll focus on understanding customer goals, pivoting quickly and offering innovative strategies. We’re committed to looking for the opportunities and finding solutions for our customers.”