Promotional products suppliers and other U.S.-based importers are slamming the brakes on importing from China following President Donald Trump’s imposition of a 145% tariff rate on most goods originating from that nation – a phenomenon that has certain merch market executives worried that inventory shortages and supply chain disruption akin to the COVID-19 era could possibly lie ahead.

Stacked cargo containers

To be clear, promo suppliers haven’t simply abandoned China for good for manufacturing purposes. That would be nearly impossible to do given years and decades of building supply lines there – and China’s manufacturing might. While supplier leaders indeed say they’re increasingly searching for destinations outside of China to produce product, they note that the reality is for certain types of hard goods in particular there’s no viable alternative to Chinese production.

With that understanding, supplier executives tell ASI Media that what they are doing is undertaking a pause in bringing in shipments from China – and in instances halting ordering from factories there. They’re doing so in the hopes that Beijing and Washington, D.C., can work out a deal that will result in the U.S. tariffs on China-made products being significantly lowered. Then, along with continuing efforts to further diversify production away from China, merch suppliers would begin importing products their China-based manufacturing partners have produced stateside again under the lower levy rates.

9.7%
That’s how much less cargo ports in China handled the week of April 7-13 than they did the week prior, reflecting the slowdown in U.S. importing from China.(Ministry of Transport, China)

“We’re pausing until we get a better understanding of how this will all play out and what the president plans to do,” says Trevor Gnesin, CEO of Counselor Top 40 supplier Logomark (asi/67866) and a member of Counselor’s Power 50 list of the promotional product industry’s most influential people.

Power 50 member Yuhling Lu, CEO/co-owner of Counselor Top 40 supplier Ariel Premium Supply (asi/36730), says the Missouri-headquartered firm is continuing to produce some orders it has already placed with Chinese factories but is suspending importing the products for the time being.

“We are taking this approach on a product category-by-category basis, based on our sales trends and current inventory levels,” Lu shares. “For how long, it will mostly be decided by the administration’s next actions on tariffs with regard to China.”

“We’re pausing until we get a better understanding of how this will all play out and what the president plans to do.” Trevor Gnesin, Logomark (asi/67866)

A number of other suppliers acknowledged to ASI Media that they’re shutting the tap on products from China for the time being, hoping for tariff relief that will allow importing from the world’s largest manufacturing nation to resume at more favorable cost levels. One supplier executive who wished to remain anonymous was asked if they knew of other suppliers in promo that were pausing China imports. They replied: “From what we’re hearing, everybody.”

It’s simply too expensive to bring shipments to the United States at the current tariff rate, given realistic cash flow and available financing, some supplier executives say.

“From an industry-wide perspective, the impact of an incremental 145% tariff on China-sourced goods is staggering, because it will result in prices more than doubling,” says Power 50 member Frank Carpenito, CEO and president of Counselor Top 40 supplier Gemline (asi/56070). “Nobody can absorb a tariff of this magnitude, so for companies not as geographically diversified in their supply chain as we are, this could get very painful quickly.” Gemline sources from a variety of nations.

Word on suppliers’ China importing pause is reaching distributors.

“My experience has been that suppliers within and outside our industry have placed pauses on purchasing new inventory,” shares Josh King, CEO of Counselor Best Place to Work distributor You Name It Specialties (asi/365123). “If Supplier ‘A’ purchases product [and imports the items] when the tariffs are high, and then the tariff is reduced and Supplier ‘B’ purchases inventory at a lower tariff level, Supplier ‘A’ is left at a distinct disadvantage, as they will have to sell the same product at a higher price point. No one wants to overpay, and until there is a clear path forward, purchasing will be paused and muted.”

88%
of promo suppliers who import products do so from China, making that nation by far the merch industry’s top sourcing destination.(Counselor State of the Industry)

That said, some suppliers report that they’re hustling to get product imported to the United States from countries that are currently subject to a 10% baseline import tariff rate. Trump had announced higher tariffs tailored specifically to nations around the globe on April 2 but then suspended those levies for 90 days, subjecting the countries instead to the lower 10% rate. Fearing the higher tariffs could go back into effect, some promo suppliers are keen to get product from 10%-tariff-rate nations through customs in America within the three-month reprieve. Importers in other industries are reportedly doing the same.

“We have been actively sourcing from other countries in Southeast Asia and will accelerate those conversations and orders,” Lu shares. “We will try to take advantage of the 90-day pause window.”

As Lu’s comments indicate, proactive suppliers are engaged in intense efforts to optimize their supply chains – initiatives aimed at getting quality products made and shipped to the U.S. with the lowest tariff burden possible. Still, it’s not a feat you can simply accomplish in an evening’s sitting.

“We have multiple team members traveling to Asia over the next three weeks to figure out what our game plan is going to be,” says Power 50 member CJ Schmidt, CEO of Counselor Top 40 supplier Hit Promotional Products (asi/61125). “We diversified our supply chain many moons ago, but there are many products/categories that don’t allow us to move out of China. To further complicate things, logistics become much more complex when importing from other countries, as they don’t have as many [shipping] lanes available.”

Gnesin notes another wrinkle. “Switching to other countries takes time and I was just quoted from a factory in Cambodia that was offering rates 60% over China prices,” he says. “[Many] of the factories there are owned by the Chinese, so of course they will take advantage of the situation. It’s called supply and demand.”

Potential for a ‘Major Product Shortage’

Given the China shipment pause, some suppliers see the potential for the promo industry to experience inventory shortfalls and sourcing disruption similar to what occurred during the societal reopening following COVID-19.

During that time, freight/shipping rates exponentially increased and it took longer than normal to import products. That was due to variables like massive manufacturing pressure on overseas factories causing production backlogs and rampant demand for ocean freight transportation that resulted in shipment delay-inducing port congestion and lack of cargo container availability.

“I think you will see suppliers who are heavily reliant on China run into out-of-stock problems sooner rather than later.” Frank Carpenito, Gemline (asi/56070)

In the current situation, much may depend on how long the suspension of shipping in products from China lasts.

Regarding promotional products industry inventory levels, Gnesin says: “If this carries on for six months, there will be a major shortage of product.” Carpenito expresses a similar view. “I think you will see suppliers who are heavily reliant on China run into out-of-stock problems sooner rather than later, because they simply will not be able to relocate their supply chains that quickly,” he says.

Lu feels a short-lived pause on importing products from China will not result in significant lowering of promo industry inventory levels, but “if it goes on for months, many suppliers will be negatively impacted.” Things get nuanced, she says, adding: “It really depends on how much stock a supplier is currently holding, but also on how much buyers continue to buy. If buying slows, for instance, this changes the equation.”

Further complicating matters is the fact that it appears that importers across various industries are also pressing the pause button on bringing products into the United States from China. While importing from China surged in March as businesses moved up shipments to get ahead of anticipated higher tariffs, the trend reversed sharply in early April following Trump’s April 2 “Liberation Day” tariff announcements and subsequent levy hikes on China.

To wit, ports in China handled 9.7% less cargo the week of April 7-13 than they did the prior week. Meanwhile, container throughput at Chinese ports retreated 6.1% week over week. Overall, the U.S. receives about 15% of China’s total global exports, which in 2023 were $3.4 trillion.

About 31%
Share of global manufacturing output accounted for by China, making that nation the world’s top manufacturing country.(United Nations Statistics Division)

Lori Ann LaRocco, CNBC’s supply chain expert, reports that “canceled freight orders and abandoned freight” are quickly becoming the norm in China as “businesses across U.S. industries put a full stop on container exports” due to tariffs.

“Furniture producers in China have seen a complete halt in orders from U.S. importers, and we’re hearing the same across toys, apparel, footwear and sports equipment,” Alan Murphy, founder and CEO of Sea-Intelligence, which provides container shipping market analysis and consulting, tells LaRocco.

Promo suppliers are concerned not about this lull from other industries per se, but rather about what happens when demand for shipping bounces back.

Say, for instance, the U.S. and China work out a deal that sees U.S. import tariffs noticeably lowered. Demand for factory space in China, as well as shipping from that nation to the U.S., is likely to skyrocket at once – similar to how it did when marketplace clamor for all manner of products exploded following COVID shutdowns. That could make it harder and more expensive to produce and import promotional products from a logistical and supply chain perspective – all while any remaining tariffs may ratchet up a product’s cost.

Legal challenges to #tariffs are mounting. This suit was filed on behalf of five small businesses who say the tariffs will cause their businesses grave harm.https://t.co/wCbOd4Ha6B

— Chris Ruvo (@ChrisR_ASI) April 15, 2025

“There is the risk of what happened during the pandemic repeating itself, whereby the surge in export shipments from China exceeds the availability of empty containers sitting in China, so suddenly rates will climb and shipment delays will ensue,” Carpenito states.

Some executives say promo may be behind other markets when it comes to getting priority from factories and ocean freight carriers. “It will take time to restart the supply chain and what makes matters worse is that promo is a small player compared to the retail industry,” Gnesin says. “Freight rates will go through the roof, no different than during COVID. It will be a mess again for a few months.”

For sure it’s not just promo pros anticipating issues. With other variables like Trump-administration-proposed million-dollar fees on U.S. port calls for Chinese shipping companies and shippers that have China-made vessels in their fleets, experts like Sea-Intelligence’s Murphy say a “massive restructuring” of freight liner services to North America may be in the cards, which can further disrupt importing efforts for promo and all industries.

“It will take months to sort out the mess,” Murphy told CNBC, “with congestion and freight rate spikes for months to come.”