Stay the course. Stay on track. Wait and see.
That’s been the refrain among industry leaders throughout this year’s tariff turmoil. It sounds like Dana Carvey’s George H.W. Bush impression, but it has been prudent considering the trade conversation took yet another turn on Thursday.
Less than 24 hours after a three-judge panel on the Court of International Trade unanimously struck down most of President Donald Trump’s tariffs imposed since April 2, a federal appeals court granted the Trump administration’s request on May 29 to temporarily pause the previous day’s ruling, reinstating the import duties “until further notice.”
- Administration officials have said that the president remains committed to imposing tariffs and may pursue other options should the courts not decide in their favor.
The plaintiffs, which include a dozen state attorneys general and several small businesses, have one week to respond to the administration’s bid for a stay pending appeal. The government will then have until June 9 to reply.
“We’re confident the Federal Circuit will ultimately deny the government’s motion shortly thereafter, recognizing the irreparable harm these tariffs inflict on our clients,” said Jeffrey Schwab, a lawyer for the business plaintiffs.
The case is likely to end up before the Supreme Court sooner rather than later.
Pricing Pressure
Ben Zhang, president and CEO of Greater Pacific, the No. 68 supplier in the 2025 PPAI 100, has accepted that the situation will worsen before it gets better.
His company, which sources roughly 70% of its products from China, still must pay the recent 30% tariffs on Chinese imports as well as the Section 301 tariff (between 7.5% and 25%) carried over from Trump’s first term.
Ben Zhang
President & CEO, Greater Pacific
“This continues to impact our cash flow and adds pressure to support our business operations,” Zhang says. “However, there is a potential silver lining: If the higher court affirms the International Trade Court’s ruling and we file a petition later, we may be able to recover some of these costs through refunds. That possibility offers some hope for easing the financial burden in the future.”
- The 25% tariffs on Canadian and Mexican imports not covered by the USMCA and the 10% baseline tariff on all imports are both back in effect following the appeals court’s decision.
- The 25% tariffs on steel, aluminum and automotive imports weren’t affected this week because they’re subject to a different law – Section 232 of the Trade Expansion Act.
- Trump’s reciprocal tariffs on dozens of countries remain on pause.
Should elevated tariffs persist, there will be pricing pressure for virtually every company operating in the United States. But for suppliers that serve as both an importer and manufacturer – like HPG, PPAI 100’s No. 4 supplier – the ultimate impact of tariffs (as a percentage increase to their selling price) will be “appreciably less” than the headline tariff percentage, according to HPG CEO Chris Anderson.
“This is critical for distributors to bear in mind,” Anderson says, “as they attempt to reconcile yesterday’s potentially alarming tariff news with the actual future impact on their business and profitability.”
Chris Anderson
CEO, HPG
Anderson adds that tariffs represent only one of many factors that determine final selling prices. With the costs of labor, materials and commodities, real estate and insurance also on the rise, his team expects that promo suppliers would likely be looking at price increases in 2025 regardless of what happens with tariffs.
“As always, the market will reward those who innovate in the midst of challenge,” Anderson says, “and who continue to make it easy to do business despite the noise and distraction in the outside world: tariffs, lawsuits, appeals and presidential tweets notwithstanding.”
Cautious Approach
Both Zhang and Anderson say their pricing strategies remain unchanged for now.
Before the appeals court’s decision on Thursday, their fellow promo leaders also expressed trepidation regarding making any changes despite the (ultimately brief) tariff relief.
“Like so much of the last few months, we still need to wait and see,” says Yuhling Lu, CEO of Ariel Premium Supply, PPAI 100’s No. 10 supplier. “Events have been so fluid and constantly changing. For this reason – as of today – there’s no change to our strategy, but we’ll be working with all of our international partners to remain flexible and keep all of our options open.”
Yuhling Lu
CEO, Ariel Premium Supply
“Unfortunately, we have to work in the moment and deal with changes as they’re confirmed by the administration,” says Trevor Gnesin, owner of Logomark, PPAI 100’s No. 12 supplier. “It’s a freaking nightmare as one doesn’t want to over commit, but on the other hand, we can’t under commit. It has become very strategic to say the least.”
Trevor Gnesin
Owner, Logomark
“At this point, we’re in a holding pattern waiting for the results of the appeal before we take any action,” says Jake Himelstein, president of BAMKO, PPAI 100’s No. 4 distributor. “We want to get closer to finality before we reverse tariffs we’ve already charged our clients or revise pricing on in-process orders.”
Jake Himelstein
President, BAMKO
Kara Keister, MAS, owner of Ohio-based distributor Social Good Promotions and Regional Relations Committee delegate to the PPAI Board, says that for now, and possibly as an ongoing policy, her team will stay the course.
“We’ll [continue to] check country of origin on all orders, request details from suppliers when we need clarification or visibility into the supply chain and make our sourcing calls based on the best interest of our clients and their brands,” says Keister, who participated in PPAI’s webinar on tariffs and trade earlier this month.
Kara Keister, MAS
Owner, Social Good Promotions
Memo Kahan, CEO of PromoShop, PPAI 100’s No. 20 distributor, echoes that sentiment.
“It continues to be a weekly change of policy and activities, and there’s no solid trajectory we can all take,” Kahan says. “We’re staying the course with our clients and suppliers, using full transparency and, unfortunately, some vagueness on the things we can’t control that keep changing.”
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Although Joseph Sommer, founder and CEO of Whitestone, PPAI 100’s No. 34 distributor, considered the original ruling a small win for small businesses, he says it’s merely the start of a new chapter in what’s already been a five-month saga.
“I’m reminded that tariffs themselves aren’t going anywhere and now my hope is that this ruling creates space for calmer, more strategic policymaking,” says Sommer, who also participated in the webinar.
PPAI’s Stance
PPAI, which has long supported free trade, has been working diligently to monitor the chaos and communicate with elected officials to make sure the economic impact on PPAI members is understood.
“We’ve been closely tracking this issue and actively engaging through advocacy channels to ensure policymakers understand the full impact – especially on businesses in the promotional merchandise sector,” says Drew Holmgreen, president and CEO of PPAI. “[The initial] ruling supports the needs of companies, both large and small, and reinforces our industry’s critical role as a core driver of brand marketing.”
Drew Holmgreen
President & CEO, PPAI
- Tariff concerns were one of the key issues discussed with members of Congress during PPAI’s Legislative Education and Action Day in April.
- Chris Lamond, partner at Thorn Run Partners, PPAI’s lobbying and advocacy partner, participated in a Q&A on tariffs and other matters during PPAI’s North American Leadership Conference earlier this month.
PPAI Board Chair Denise Taschereau, CEO of Canadian distributor Fairware Promotional Products, adds that tariff uncertainty is here to stay – at least for the foreseeable future.
“As a Canadian distributor, we’ve learned to adapt to this new ‘usual,’ where pricing volatility and shifting trade policies are part of our everyday risk management,” Taschereau says. “We’ll continue to work closely with our supplier partners to mitigate disruptions and deliver great merch to our clients.”
Denise Taschereau
PPAI Board Chair & CEO of Fairware
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
