President Donald Trump kicked off Memorial Day weekend by threatening to implement a 50% tariff on imports from the European Union.
In a post on Truth Social on Friday, Trump claimed the EU has been “very difficult to deal with” regarding trade negotiations. Because discussions have been “going nowhere,” the president said he recommends a 50% tariff on EU imports, starting June 1.
- That’s more than double the 20% rate the U.S. had briefly placed on EU imports before Trump paused country-specific reciprocal tariffs.
- The pause is set to expire on July 9.
Following Trump’s Truth Social post, Treasury Secretary Scott Bessent told Fox News that the “EU proposals have not been of the same quality that we’ve seen from our other important trading partners.”
In addition to a trade deal with the United Kingdom and a short-term agreement with China, Bessent said talks are “far along with India” and that many Asian countries have presented “very good deals.”
“There are 18 important trading partners and, I would say, with the exception of the EU, most are negotiating in very good faith,” Bessent added. “I’m not going to negotiate on TV, but I would hope that this would light a fire under the EU.”
Impact On Promo
If the proposed tariff does go into effect, it would have significant consequences for the promotional products industry on both sides of the Atlantic, according to Steven Baumgaertner, chairman of the European Associations Cooperative and CEO and global director of sales at Cybergroup International, PPAI 100’s No. 34 distributor.
“The transatlantic flow of goods, which many companies rely on for branded merchandise, would be severely disrupted,” Baumgaertner says. “Protectionist measures like these disproportionately affect small and medium-sized businesses that have spent years building trusted supply chains and sustainable production partnerships. The result would be rising costs, delays in delivery and growing uncertainty in an already fragile global trade environment.”
Steven Baumgaertner
EAC Chairman & CEO of Cybergroup International
“Now more than ever,” Baumgaertner adds, “industry associations on both continents must present a united front to advocate for our sector and work toward fair, open and future-focused trade solutions.”
Uncertainty makes it almost impossible to plan, and economics experts are warning that the ongoing tariff turmoil will soon make itself felt beyond pricing pressures.
In a speech given May 15, Federal Reserve Chair Jerome Powell said, “We may be entering a period of more frequent, and potentially more persistent, supply shocks.”
ICYMI: ‘Supply Shocks’ Ahead? How Back-And-Forth Tariffs Are Affecting Global Shipping
The Wall Street Journal reported a week earlier that “U.S. importers have frozen or canceled billions of dollars worth of orders, potentially leaving them short-handed for the essential back-to-school or holiday sales periods,” adding that some had already paid hefty deposits for products that could no longer be sold for a profit.
Promo isn’t immune to these slowdowns.
During PPAI’s May 8 webinar on tariffs and trade, Jonathan Isaacson, executive chair of Gemline, the No. 13 PPAI 100 supplier, warned that major U.S. retailers have paused large orders from China, creating “a giant backup” and prompting shipping companies to adjust by rerouting or reducing traffic.
“Where you have a bunch of stuff that’s normally going from China to the U.S., the shipping companies are making the rational decision and they’re reallocating those ships to other routes or … stopping them,” he added. “And once you pull it out, it’s not like you can flip a switch and put it back in.”
Drew Holmgreen
President & CEO, PPAI
PPAI lobbyist Chris Lamond of Thorn Run Partners says that the Association is working diligently to monitor the chaos and communicate with elected officials to make sure the economic impact on members is understood.
“I think we’re getting really sympathetic ears on Capitol Hill as to the impact that this uncertainty is causing our members and their constituents,” Lamond said, “… although this administration has been extremely strident in their viewpoint that they want to reset the global trade market.”
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PPAI President & CEO Drew Holmgreen agreed and urged members to share their own tariff impact stories with their members of Congress.
“Use your voice. We need these stories,” he said. “When we were in D.C. for LEAD, it was those stories of impact that were really resonating with our Congress members.”
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
