UPDATE MARCH 11 5 p.m. 

This article was updated to show that President Donald Trump walked back his March 11 threat to impose a tariff rate of 50% on Canadian steel and aluminum imports. As of this writing, tariffs of 25% on steel and aluminum imports from all countries, including Canada, were poised to take effect at midnight March 12.

President Donald Trump’s administration remained poised late March 11 to implement flat-rate tariffs of 25% on steel and aluminum from countries across the globe on March 12. 

The tariff action, if followed through on and sustained, will contribute to price increases on promotional products, like certain drinkware, while also potentially fueling further trade war-driven turmoil for promo pros in Canada, according to merch industry executives.

The levies apply to millions of tons of steel and aluminum imports coming from any country, including Canada, Mexico, Brazil and South Korea, which had previously been operating under exemptions that allowed them to export the metals to the United States duty-free. The 25% steel rate had been in place for countries not granted exemptions. The new levies set to be effective March 12 will increase Trump’s 2018 aluminum import tariffs from 10% to 25%.

Initially, Trump was going to hit Canadian steel and aluminum imports with levies of 25%, but he pledged March 11 to up the rate to 50%. The president said he intended to double the rate in response to a decision by Ontario’s government to place a 25% tax on electricity exports to the U.S. – a move Canadian officials made in response to previous Trump tariff actions. However, Trump later in the day March 11 dialed back the threat of 50% tariff rates on Canadian steel and aluminum, as Ontario Premier Rob Ford decided to pause the pause the electricity surcharge. 

Now, U.S. Commerce Secretary Howard Lutnick and Ontario Premier Doug Ford are expected to meet Thursday to renegotiate the United States-Mexico-Canada Free Trade Agreement (USMCA). While those discussions could impact how things play out with U.S. tariffs on Canada and Canadian retaliatory measures, as of this writing U.S. steel and aluminum tariffs of 25% on Canada were set to take effect at midnight March.

Trump has said the tariffs on all steel and aluminum imports from any country will help safeguard and strengthen the U.S.s' domestic steel industry, a development the president believes is necessary for national security and for broadly bolstering the United States’ manufacturing sector and economic power. “President Trump is taking action to protect America’s critical steel and aluminum industries, which have been harmed by unfair trade practices and global excess capacity,” the White House said in a statement.

$2.8 billion
Industry-wide distributor sales of drinkware, making it the second-bestselling product category. Steel and aluminum tariffs are likely to contribute to price increases on promo drinkware containing the metals. (Counselor State of the Industry)

If the tariffs go into and stay in effect, they’ll contribute to price increases on promotional products that contain steel and aluminum components, according to suppliers. Stainless-steel tumbler drinkware, housewares/kitchenwares and certain outdoor-focused products are among the imported goods that stand to be most affected by the steel and aluminum levies (though any product with the metals could see hikes).

Steel and aluminum-containing products coming from China could be among those especially hard hit, as they’re already subject to 20% additional tariff rates that Trump has instituted on China-made imports in 2025. Promo sources the majority of products sold in the U.S. from China-based manufacturers.

“The steel and aluminum tariffs will impact promo products as they include various derivative products that are sold in our industry,” explained Tim Behling, vice president of supply chain and sustainability at Counselor Top 40 supplier Gemline (asi/56070). “Derivative products are items that are manufactured out of stainless steel or aluminum. Pricing impacts could happen as early as April for some items.”

Trevor Gnesin, CEO of Counselor Top 40 supplier Logomark (asi/67866) and a member of Counselor’s Power 50 list of promo’s most influential people, said there’s a chance that perhaps some steel and aluminum products promo sells may be exempt, but it wasn’t clear which ones as of this writing, given customs complexities. Bottom line: Gnesin also expects price increases on steel and aluminum promo products due to the levies on those metals, the China-specific tariffs and other so-called reciprocal tariffs on countries around the globe that the Trump administration may bring into play later this year.

“Pricing impacts could happen as early as April for some items.” Tim Behling, Gemline (asi/56070)

“No supplier or retailer can absorb such large tariffs,” Gnesin told ASI Media. “Some products will see immediate [price increases]. Depending on how suppliers adjust their pricing, I believe that the big impact with pricing will start to take place in the second quarter, with the third quarter bearing most of the jump.”

Drinkware is the second-bestselling product category in promo, accounting for nearly 11% of industry-wide distributors’ sales, according to the Counselor State of the Industry report. The category has been ascending in popularity in recent years. Still, some executives wonder if the steel and aluminum tariffs could put a pin in drinkware’s bubble – or at least reduce sales momentum.

“The tariffs could result in customers switching to other product categories not impacted by these steel and aluminum tariffs,” Behling said.

Canadian Perspective

Canadian promo pros could experience multilayered negative impacts from the U.S. steel and aluminum tariffs, if they stay on the books. Like their counterparts in the U.S., Canadian distributors could be paying more for steel and aluminum products sourced from U.S. suppliers who’ll be hiking prices because of the new levies on the metals.

But what’s more, there could be broader effects on the Canadian economy that chill promo spending, some industry executives said.

Consider: Canada is the country from which the United States imports the most steel and aluminum. If the proposed 25% American duties diminish U.S. demand for Canadian steel and aluminum, that could send detrimental effects rippling across the Canadian marketplace. Taken with other import tariffs of 25% that Trump implemented and then partially suspended until April 2 on Canadian exports to the U.S., the American levies could weaken Canada’s economy. The uncertainty tied to the tariffs are cause for concern alone. A potential repercussion of it all for promo? Possibly clients spending less on branded merchandise.

“What we can’t do is minimize the economic effect of a tariff war. That is my biggest concern by far. I fear customers will spend less to remain conservative.” Mitch Freed, Genumark (asi/204588)

“For promo, the economic uncertainty could mean fewer marketing dollars spent by businesses in affected industries,” said Denise Taschereau, co-founder/CEO of Vancouver, BC-based Fairware (asi/191452), a Counselor Best Place to Work. “When companies feel economic pressure, we all know promotional budgets are often among the first to be trimmed.”

Counselor Power 50 member Mitch Freed, CEO of Toronto-headquartered Counselor Top 40 distributor Genumark (asi/204588), said the entire tariff discussion is concerning on a macroeconomic level.

“Our supply chain is nimble and our options are endless, so with a little extra research and care we can almost entirely divert customers away from tariff-impacted products,” Freed asserted. “What we can’t do, however, is minimize the economic effect of a tariff war. That is my biggest concern by far. I fear customers will spend less to remain conservative.”

“The tariffs and their impacts are making it harder to maintain predictable pricing for clients. We’re finding ourselves modeling out impacts and working with clients on budgets.” Denise Taschereau, Fairware (asi/191452)

Rich Patterson, owner of PBJ Merch (asi/291582) in New Westminster, BC, shared an anecdote about the everyday effects tariffs could have on business. This week, he took a client/close friend who owns a successful craft brewery to a Vancouver Canucks game. The two got to chatting shop a bit, and Patterson asked how the steel and aluminum tariffs might impact the brewery. The brewer said the price he’ll have to pay for cans for his beer is going up, as he sources from U.S.-based suppliers that are hiking their prices.

“Our businesses are tied to our customers,” Patterson said. “As their economies go, so do ours. Aluminum tariffs will slow the economy overall and impact some industries more heavily than others. And as the economy slows it hurts our promo businesses, which are one of the top-line discretionary expenditures and first to go in tight times.”

Promo pros in the U.S. and Canada will have to consult closely with clients to find workable solutions, something Fairware is certainly doing. “The tariffs and their impacts are making it harder to maintain predictable pricing for clients. We’re finding ourselves modeling out impacts and working with clients on budgets,” Taschereau said.

Just how things will play out with the U.S.-Canada tariff tension remains to be seen, but some promo leaders think it may not be a quick fix.

“I think the U.S. has underestimated Canada’s resolve on this issue,” Taschereau said. “We’re seeing this as not simply an attack on our economy, but as an attack on our sovereignty. It’s really hard to anger Canadians, but the current U.S. administration has managed to do so.”